Gold price remains relatively neutral on Tuesday as the dollar was boosted by expectations U.S. interest rate will rise this month and by worries the Sino-U.S. trade war could escalate. Strong U.S. payrolls data last week cemented expectations that the U.S. Federal Reserve will raise interest rates in September, in what would be its third hike this year, with expectations of one rise more in December. Higher rates increase bond yields, making non-yielding bullion less attractive, and tend to boost the dollar. With the greenback supported by expectations of higher U.S. interest rates, short term outlook remains bearish for Gold market. Spot Gold XAUUSD is currently trading flat at $1196.05 an ounce up 0.01% on the day, while US Gold futures GCcv1is trading at $1201.50 an ounce up 0.13% on the day.
Turkey, Iran & Russia Have Decided to Conduct Bilateral Trades in Their Own Currencies To Avoid Use of USD
The US Greenback is also supported by President Donald Trump’s comments from last week as he mentioned that he was ready to impose tariffs on virtually all Chinese imports to the United States. While China has promised to retaliate in equal force in case tariff is implemented by US, investors are flocking to USD as many continue to believe that the United States has less to lose from a trade war – making dollar-priced precious metals more expensive for non-U.S. buyers. Investors caution on trade war related proceedings has resulted in funds being moved out of Precious metals. Spot Silver XAGUSD is trading at $14.197 an ounce up 0.14% on the day.
Crude oil futures were stable to higher during mid-morning trade in Asian market hours today amid expectations that latest US crude stocks data will show a decline and participants monitored geopolitical tensions and developing hurricanes in the US. The impact of US sanctions on Iran continued to dominate market attention Tuesday, with Turkey, Russia and Iran reaching an agreement to conduct bilateral trades in their own currencies to avoid the use of US dollars, Turkey’s state-owned Anatolia news agency reported. This announcement follows a meeting between Iranian President Hasan Ruhani, Turkish President Tayyip Erdogan and Russian President Vladimir Putin in Tehran on Friday. At the same time a Reuters report suggests that Saudi Aramco will supply additional crude to at least two Asian buyers in October after they asked for more supplies. Saudi is also resuming higher crude oil exports to the United States to regain market share and keep a lid on oil prices and U.S. gas prices, at least until the mid-term elections in November. Spot Crude WTIUSD is trading at $67.97/b up 0.24% on the day.
This article was originally posted on FX Empire
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