Gold witnessing strength as dollar faces pressure
Gold has begun to experience strength while the dollar declines. The potential new round of U.S. and China trade talks has pushed the precious metal price up as investors are worried about an economic growth slowdown. The possibilities of a slowdown in economic growth has forced senior U.S. officials to suggest another trade meeting with China which could possibly make a change in Washington’s policy.
The constant trade dispute between the United States and China had led to investors to invest into the U.S. dollar in faith that the state has less to lose from this trade war. However, it has at the same time led investors into short positions in Comex gold and gold exchange traded funds has seen substantial liquidations. Moreover, if these short positions continue gold prices may continue to be on the rise. The market price for gold has been seen to be at $1211.30. This shows how beneficial a decrease in the dollar can be for the yellow gold.
Gold is taking full advantage of the dollar’s weakness where it is known to rely upon the greenbacks decline in price. However, the rate hikes which are scheduled to be carried out in September are yet to commence and are expected to startle the gold prices and increase dollar’s strength. Therefore, investors will stay wary of this.
Oil prices decline as demand drops
Oil prices have seen a decline in price as the economy’s growth becomes a stronger concern. West Texas Intermediate (WTI) and Brent crude futures were seeing constant increases in price while supply had shortened. On the other hand, at present it seems the prices have declined where WTI had decreased by 46 cents which had left it at $69.21 per barrel. Similarly, Brent crude futures had also been affecting as the oil had declined by 38 cents, leaving the price at $79.35 per barrel.
The declines which are present in the market for oil had originated from concerns of economic growth slowdown as the demand for fuel had dropped. This was because of the trade disputes which are on-going between U.S. and China. Additionally, American companies which are operating in China are taking abuse by the tariffs being imposed by Trump. The concerns of a slow down in economic growth has pushed individuals to convince the Trump administration to reassess its tactics towards the trade wars, in order to rectify any concerns of a slowdown.
At present sanctions being placed on Iran were pushing prices for oil up. This is because of a shortage of supply. This alone affects economic growth as with prices increasing, the demand for oil drops. Along with this, economic growth and currencies are affected by continuous trade disputes where Trump has planned to impose $267 billion worth of tariffs on Chinese goods.