Precious Metals Move Downtrend as Risk Appetite Increased Post US Election Result
Gold prices fell to their lowest in a week on Thursday as the dollar and stocks rose, while investors digested the U.S. midterm election results and turned their focus to the Federal Reserve’s monetary policy decision due later in the day.
The yellow metal has taken a sharp bearish decline as risk sentiment returned to investors post US election results and equity markets saw positive price action across the day. As of writing this article, Spot gold XAUUSD is currently trading at $1223.55 an ounce down by 0.25% on the day, while US gold futures GCcv1 are trading at $1224.30 an ounce down by 0.35% on the day. Moving forward, investors are now awaiting forward guidance on fed rate hike decisions from FOMC update scheduled to release later today.
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Crude Oil Production Cuts Likely As Supply Remains Ample
The Fed is not expected to raise interest rates until its next gathering in December, however, market participants are waiting to see whether it offers clues about possible rate increases in December and in 2019. A rate increase in December is all but fully priced in, but next year’s outlook is still in flux. A confident tone is likely to weigh on precious metals, while a cautious one may give them a bit of a lift.
The Fed raised rates in September and said it planned four more increases by the end of 2019 and another in 2020, citing steady economic growth and a robust jobs market. U.S. interest rates tend to boost the dollar and also push up bond yields, reducing the appeal of non-yielding bullion. Spot Silver XAGUSD is currently trading at $14.48 an ounce down by 0.64% on the day.
Oil prices were stable on Thursday, supported by rumblings from within OPEC that production curbs may become necessary again to prevent a return of global oversupply as recent price action surrounding crude oil indicated a high level of caution and worry among investors over the possibility of oversupply in the crude oil market.
Oil prices continue to demonstrate…bearish influences amidst market concerns of rising global inventories and increasing output levels threaten to upset supply fundamentals in upcoming quarters as oil is still in ample availability despite sanctions on Iranian crude and productions cuts announced by OPEC members in June earlier this year resulting in analysts believing that there may be more OPEC-led production cuts next year. As of writing this article, spot us crude oil WTIUSD is currently trading at $62.02 per barrel up 0.78% on the day.