Precious Metals Gain on Weak US Greenback Amid Trump Woes
Gold rose on Friday after falling in the previous session, as the dollar eased and markets awaited a speech by the Federal Reserve chairman for fresh clues on the direction of U.S. monetary policy. Spot gold XAUUSD was up 0.3% at $1,188.96 an ounce at 0716 GMT, after falling 0.9% on Thursday. While U.S. gold futures GCcv1 were up 0.1 percent at $1,195 an ounce. U.S. and Chinese officials ended two days of talks on Thursday with no major breakthrough as their trade war escalated with the activation of another round of tariffs on $16 billion worth of each country’s goods. Investors are worried about the trade war and that has helped the dollar. But, the dollar will not be as strong as it has been going forward and that should help Precious metals prices to go up. There is some buying as gold has been in a downward trough for a while. $1,200 remains an interesting level and we might see prices going down again if that level does not hold.
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Powell’s Speech Is Main Focus of Investors on Last Trading Session of the Week
Moving forward Fed Chairman Jerome Powell is set to speak at an annual meeting of central bankers in Jackson Hole, Wyoming, later today. Fed policymakers broadly agree that U.S. interest rates should rise further this year and next, despite President Donald Trump’s displeasure with such a plan, two policymakers’ comments underscored on Thursday. This shows that policy makers will not be influenced by Trump’s tantrums. However investors are keen to know what is Fed Chair Jerome Powell’s stance on future rate hikes, as he was appointed in his position by President Donald Trump and any signs of dovish sentiment in his speech would result in downtrend movement for US Greenback. Spot silver also saw some positive market activity on Friday’s Asian market hours and XAGUSD pair is currently trading at $1190.65 up 0.46% on the day as of writing this article.
Oil is poised for its first weekly gain in two months as shrinking US crude inventories, a strike in the North Sea oil and gas fields and looming sanctions on Iran point to tighter supplies. Futures in New York were little changed, headed for a weekly gain of about 3 percent. Workers at Total SA’s North Sea oil and gas fields will go ahead with scheduled strikes after talks broke down. Government data on Wednesday showed nationwide US crude stockpiles declined 5.84 million barrels last week, more than double what was expected in a Bloomberg survey of analysts. Oil has rebounded from the lowest level in more than two months in mid-August as renewed US sanctions on Iranian oil sales threaten to limit supplies. Still, a trade standoff between the US and China that could imperil global economic growth and weaken energy demand continues to weigh on crude prices after negotiations in Washington this week failed to progress. Spot Crude WTIUSD is trading at $69317/b up 0.70% on the day.