Precious metals saw positive price action on Monday as investors took a risk averse stance leading to some amount of activity in gold and silver as they are viewed as safe Haven instruments despite both instruments losing luster in recent days owing to US Greenback taking the positive of most sought after safe haven instrument of 2018. Gold hit a 2-1/2 month high the previous session in spot market influenced by multiple factors such as rising political tensions between west and Saudi Arabia & economic uncertainty in European markets owing to Italian Budget proceedings. As of writing this article, Spot Gold XAUUSD is trading near flat at $1226.66 an ounce down by 0.02% on the day, while US gold futures GCcv1 was trading at $1230.40 an ounce up 0.0081% on the day.
Saudi Threatens US Over Interference in Matter Concerning Murder of Saudi journalist
The price action in gold remains flat near yesterday’s high’s despite falling from previous day’s intra-day high as investor sentiment in market still has cautious tone and risk averse scenario seems to be active as well. The reason for flat price action in gold could be said to be result of profit booking activity after the instrument hit new highs and lack of trigger to push the pair forward. Spot silver market saw some significant downtrend activity today with XAGUSD pair trading at $14.647 an ounce down by 0.32% on the day. While gold hit new high’s yesterday spot silver’s price action was relatively muted despite trading in green for majority of Monday’s market hours. Crude oil price shot up as trading session started for the week owing to multiple reasons such as increase in tension between US & Saudi Arabia and signs of further decline in Iranian crude exports for the month of October.
Saudi Arabia all but threatened to drive up oil prices if the U.S. took any action to penalize it over the apparent killing of a Saudi journalist. The not-so-subtle threat was the first time in decades that Saudi Arabia threatened to restrict supply for such naked political reasons. If Saudi follows up on its threat, then the chance of crude oil price crossing $100/b is highly likely which will cause great inconvenience for President Trump who has been protesting the hike in crude oil price in recent past. Iran has exported 1.33 million barrels per day (bpd) to countries including India, China and Turkey in the first two weeks of October, according to Refinitiv Eikon data, which is down from 1.6 million bpd in September as per the data. Spot US Crude WTIUSD is currently trading at $71.56/b down 0.26% on the day after hitting an intra-day high of $72.11/b in early Asian market hours.
This article was originally posted on FX Empire
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