Precious Metals Take Dovish Turn On Strong USDUpbeat USD demand in the global market caused gold to erase gains from early market hours. Gols is currently trading in a bearish sentiment.
Gold prices edged higher on Tuesday as risk appetite fell, with Asian stocks slipping to 17-month lows amid concerns over a potential slowdown in China’s economic growth. Spot gold XAUUSD was up 0.2% at $1,189.58 an ounce at 0715 GMT but took a nose dive in European market hours and is currently trading at $1185.80 down 0.18% on the day.
On Monday, it fell 1.2% its biggest one-day percentage fall since Aug. 15, and also touched a more than one-week low of $1,183.19, meanwhile U.S. gold futures GCcv1 rose 0.4 percent to $1,193.0 an ounce. Gold is getting some support from bargain hunting and also some safe-haven support on concerns of a potential sell-off in equities. Gold has held in a $34 range for the last 1-1/2 months, which some analysts say suggests resilience. Worries over the damage to emerging market economies from higher U.S. interest rates have spurred safe-haven bidding.
Bargain Hunting Helped Gold Edge Up In Asian Market Hours
While USD remains the most preferred choice of safe haven instrument among investors, gold comes in second place. While similar safe haven currencies such as Swiss franc and Japanese yen exist, gold always attached higher bets compared to these two currencies and in an event of safe haven bid gold is likely to come as second most sought-after instrument across globe and physical demand could also increase which could help offset loss from increase in value of US Greenback in which dollar is denominated. Spot silver XAGUSD is currently trading at $14.295 down 0.49% on the day.
Oil prices rose on Tuesday on growing evidence of falling crude exports from Iran, OPEC’s third-largest producer, before the imposition of new U.S. sanctions and a partial shutdown in the Gulf of Mexico due to Hurricane Michael. The oil market mood is exceptionally bullish, with fears growing that the U.S. demands for an Iran oil embargo could cause a significant supply shortfall. Benchmark Brent crude was up 65 cents at $84.56 a barrel by 0850 GMT, having fallen as low as $82.66 on Monday. Meanwhile, US Spot Crude oil WTIUSD is trading at $75.08/b up 0.97% on the day.