Gold Holds Level as Market is Ruled By Trade War Tensions

Precious metal market is currently ruled by geopolitical and trade war concerns. This week has no major release in macro calendar and traders have taken to observing proceedings of trade wars between major global economies. Lingering concerns about trade wars between the United States and the rest of the world offset expectations of a U.S. interest rate hike this month.

Gold traders will keep their focus on more trade-related headlines in the coming week, as President Donald Trump prepares to meet world leaders at the G7 summit in Canada. Fresh geopolitical developments surrounding President Trump’s planned meeting with North Korean leader Kim Jong later this month will also be on the agenda. Political climate in unstable European countries such as Italy and Spain have calmed down for now.

While the normal trend for gold is to trade bearish ahead of rate hike fed meets, trade war concerns, and N.Korean summit keep momentum fresh in XAUUSD pair trading. Traders focus is the meanwhile will be on US macro data release scheduled for to place short bids.

Silver in Stable Price Range

Silver continues to move range bound inside $16 price range for the 6^th consecutive week with no major price swing and the XAGUSD pair is expected to maintain range unless silver manages to breach the price above or below $16 price range. WTIUSD continues to trade at $65 per barrel as US Oil imports in the Middle East saw a huge spike post-Brent to WTI price discount. Another factor for WTI price at $65 is Oil production in US reaching record high. OPEC members have also decided to increase output to meet global demand.

Benchmark Brent crude oil was unchanged at $76.79 a barrel by 0845 GMT. ministers from Saudi Arabia, the United Arab Emirates, Kuwait and Algeria along with their counterpart from non-OPEC Oman met unofficially in Kuwait on Saturday and agreed on the need for continued cooperation between members of the Organization of the Petroleum Exporting Countries and other big producers to balance global supply. OPEC meets formally on June 22 to set new oil policy. It is expected to agree to raise output to cool the market amid worries over Iranian and Venezuelan supply after Washington raised concerns the oil rally was going too far. As for this week, WTIUSD pair is expected to continue moving around $65 price range unless there is any new factor that could offset current demand and supply trend.