Gold Hits 2018 Low As Dollar Grows Strong

XAUUSD hit $1288.20 during American market hours yesterday and is currently trading around $1290.80 down 1.82% when compared to yesterday’s high at $1314.80. US dollar continues to grow strong against major global currencies as bond yields hit new high during yesterday’s trading session.

As US dollar index hit a 5 month high, the yellow metal reached 5 month low and also crossed psychological resistance of $1300. Gold is expected to continue its subdued momentum during today’s trading session.

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Gold Turns Weak

While Silver also saw similar downtrend movement as Greenback grew strong, XAGUSD has managed to remain well within $16 price range. The pair hits as low as $16.205 but started moving back up during early Asian market hours today morning. Both gold and silver are expected to cover some ground lost yesterday and move back uptrend as there seems to an increased short-covering activity since the trading session began this morning.

Oil prices fell on early Wednesday, weighed down by ample supplies despite ongoing output cuts by producer cartel OPEC and looming US sanctions against major crude exporter Iran. Despite the dips, both financial oil benchmarks Brent Crude & WTI remained close to their November 2014 highs of $79.47 and $71.92 a barrel respectively, reached the previous day.

Spot crude oil cargo prices are at their steepest discounts to futures prices in years as sellers are struggling to find buyers for West African, Russian and Kazakh cargoes, while pipeline bottlenecks trap supply in west Texas and Canada. The bottleneck in North America likely contributed to a 4.9 million barrel rise in US crude oil inventories, to 435.6 million barrels, that the American Petroleum Institute reported on Tuesday. WTIUSD is expected to make range bound movement across today’s trading session moving within range of $70 to $72. A move above $72 in WTIUSD would result in pair trying to attempt a bullish breakout.