Gold Rebounds Post Hitting New Lows as US Greenback Turns Slightly Dovish

Gold prices edged up early Friday after slipping to a more than six-month low in the previous session, as the dollar softened from recent highs, but the yellow metal was headed for its worst monthly performance since November 2016. This dovish stance of US Greenback comes from mixed US macro data and spike in Euro’s value post European commission leaders/ reaching a deal on migration.  The XAUUSD pair went as low as $1247.20 in late North American session before seeing a rebound in Asian market hours. However a look at 4 hour chart shows that Gold remains in track for worst month of performance since November 2016. Spot gold is currently up 0.3%, trading at $1253.00 while the Gold futures for August delivery is trading at $1252.50. The yellow metal is currently in third consecutive week of bearish streak with 1.4% decrease in value this week alone and 3.6% decline for the month.

Silver hit new multi-month lows on North American market hours before moving back into $16 price handle. XAGUSD pair closed on Thursday at $15.830, the lowest since December 2017 before moving back into $16 price handles in Asian market hours on Friday. The reason for Silver reaching new lows despite moving within fixed range for majority of the month is because of Indian Rupees reaching new lows against US dollar. India is a major consumer of silver in Spot market as well as trading markets. India and Singapore are the two major players in global level aside from US market who could cause significant impact on Silver price movement. This downtrend movement of Indian rupee in part due to the spike in oil prices the past week. With investors choosing to invest in safe haven currencies over highly volatile geo-political climate, there has not been a major issue yet that could cause investors to opt for precious metals given that a higher value of US Greenback makes it harder for investors to choose dollar denominated precious metals as such both Silver and Gold pair which trade against US dollar would likely continue to trade dovish in near future trading sessions.

Crude oil futures were lower during mid-morning trade in Asia Friday after US comments that increased supply from OPEC would be sufficient to cover the supply gap seen likely to stem from the loss of Iranian crude. WTIUSD hit highest since November 2017 at $74.03 as US continues to force its allies to bring Iranian Oil import to zero with threat of imposing sanctions if allies fail to comply with US demands. This attitude from US has caused friction in relationship between allies and US, Asian stock market hit nine month low as Sino-U.S trade war continues to escalate causing Oil price to move back to $73 handle in early market hours on Friday. The WTIUSD pair is currently trading at $73.18, however some analysts are of opinion that crude market conditions remain tight due to supply disruptions and generally high demand.