Gold & Crude Oil Affected By Geo-Political Decisions

Last week, the yellow metal rose from its 2018 low and managed to regain a foothold above $1300 as global tensions increased after Trump’s decision to call off the negotiations with North Korea. The decision caused a huge demand for safe-haven assets. However, the tension died down soon due to pro-active approach from North Korea to re-establish discussions with the USA.

Since trading session began on Monday gold price turned dovish and during European market hours, XAUUSD pair plunged below $1300 once again as news hit the market that delegations from both the countries had met. Risk sentiment has opened in a much friendly place this morning as a relief rally has ensued with the Trump-Kim summit back on, while the EU is in the midst of a relief rally after Paolo Savona was not endorsed for finance minister in Italy.

Silver prices remained above $16 price range, although during the Asian trading session, the commodity saw a slight bout of activity as many investors chose to offload their position in response to a nearly neutral momentum of XAGUSD pair over the last few weeks.

The weak trend along with increase in risk appetite among investors caused silver to go down slightly during Asian market hours despite the pair remaining well within $16 price range.

Crude Oil prices fell sharply on Monday, extending a steep decline in the previous session as the market eyed an increase in output from the world’s three top crude producers, Russia, the United States and Saudi Arabia.

The WTIUSD pair is currently trading at $66.72 seeing nearly $2 decrease in value over news of output increase. Meanwhile, surging US crude production also showed no sign of abating as drillers continue to expand their search for new oil fields to exploit. US energy companies added 15 rigs looking for new oil in the week ending May 25, bringing the rig-count to 859, the highest level since 2015, in a strong indicator that American crude production will continue to rise.  The WTIUSD pair is expected to move range bound around $1290 to $1310 price range during this week.