Gold Holds Above $1300 Price Handle despite US Greenback’s Strength

Gold prices on Friday steadied below a one-month high hit in the previous session and were on track for a second straight weekly gain amid concerns over U.S.-China trade dispute. Early morning session saw some sell off activity that resulted in pair testing $1300 handle post hitting high of 1312.90 during early North American market hours. However the XAUUSD pair is expected to remain above $1297 price handle across Friday even if later sessions see some sell-off activity in case U.S-China tariff related updates end in favor of US dollar. Investors are keeping a close tab on trade tensions between the world’s top two economies and if the United States imposes tariffs on Chinese goods, gold is expected to move back above $1310 price handle. U.S. President Trump has made up his mind to impose “pretty significant” tariffs on Chinese goods, an administration official said on Thursday, as Beijing warned that it was ready to respond if Washington chose to ratchet up trade tensions.

As tensions get higher, investors continue to view gold as an excellent hedge against a possible equity/currency market tumult if trade war escalates beyond the status quo. Silver is trading on positive note similar to gold, XAGUSD pair has managed to remain above $17 price handle despite strength of US dollar and is expected to continue above $17 price handle as trading session closes for the week.

Oil prices are in a holding pattern as we await the outcome of the OPEC+ meeting in a few days, and while the result of that meeting will almost completely control the direction of oil prices in the near-term, there is a bit of disagreement among analysts over the bigger picture in regards to the trajectory of oil prices going forward. Brent oil prices extended declines on Friday, as Saudi Arabia and Russia, architects of a producer deal to cut output, indicated ahead of a key OPEC meeting in Vienna next week that production could rise. Brent and WTI hit 3-1/2-year highs in May, but have since drifted lower as U.S. crude production rises and as the Organization of the Petroleum Exporting Countries, Russia and other allies look poised to increase output in their meeting in the Austrian capital on June 22-23. Brent Crude is trading around $75 price handle while WTIUSD hit $67.16 on Thursday post which it is trading around $66.88.