Precious Metals Trade Positive on Brexit Woes And Risk Off Trading ActivityIncreased safe-haven demand on Brexit woes pushes the gold price back above $1300 handle hitting two weeks high earlier today. caution ahead of UK parliament meeting outcome is expected to keep precious metals trading in Green in immedaite and near future trading sessions.
Precious metals trade positive for the third consecutive session today as increased risk-off trading activity in Asian markets and cautious investor sentiment owing to Brexit woes in European markets. Disappointing US macro data yesterday helped weaken the strength of US Greenback in the broad market and this also helped precious metals gain fundamental support during today’s positive price action. Weaker USD in global market facilitates increased participation from investors who hold other global currencies as lower exchange rate makes it easier to invest in Dollar denominated precious metals. Concerns of economic slowdown as gripped market owing to disappointing macro data outcome and this boosted appeal for gold and silver owing to their status as safe-haven assets.
Crude Oil Gains With Increase in Fundamental Support
Brexit which is the major focus of global investors this week is an event that will have great significance on price action owing to its impact on UK & European economy. UK PM May’s Brexit deal was rejected in parliament vote yesterday and comments from EU members suggest that it won’t be easy for the UK to get an extension for Brexit deadline increasing the possibility for disorderly no-deal Brexit. Concerns for the impact of no-deal exit on both economies and outcome of the UK parliament’s vote on no-deal exit and extension of article 50 deadline is now the main focus of investors. This has caused investors to take a cautious stance boosting demand for safe-haven assets. This helped Gold find demand in spot and futures market and with influence from weak USD in the broad market, the price of yellow metal moved back above $1300 handle and hit two weeks high earlier today.
As of writing this article, spot gold XAUUSD is trading at $1308.70 per ounce up by 0.55% on the day, while US gold futures GCcv1 is trading at $1308.80 per ounce up by 0.82% on the day. Meanwhile, spot Silver XAGUSD is trading at $15.53 per ounce up by 0.54% on the day. Crude oil price gained for the fourth consecutive trading session today supported by a sudden increase in the number of factors that underpin positive crude oil price. crude oil bulls are already receiving support for positive price action from production and supply cut enforcement which began since January. Further, additional reduced output from Saudi Arabia this month and plans to keep production and export well below required levels till April boosted fundamental support for Crude oil bulls in the broad market. Adding to this supply disruption from Venezuelan exports over unexpected power outage which has lasted for more than 2 days and unexpected sudden draw in US API Crude oil weekly inventory data also provided support to crude oil bulls resulting in fundamentally backed consecutive sessions of positive crude oil price action in the global market. As of writing, spot US crude oil WTIUSD is trading at 457.30 per barrel up by 0.56% on the day.