Yahoo Finance Gold Falls Further As Turkish Crisis Spiked Demand for USD
Gold prices extended declines into a third session on Monday, as the U.S. dollar climbed to a 13-month high against major peers amid the financial crisis in Turkey. Spot gold XAU= had dropped 0.47% to $1,205.74 as of writing this article, hovering not far from a 17-month low of $1,204 hit earlier in August. U.S. gold futures GCcv1 were down 0.52% at $1,212.60 an ounce.
Gold today is seeing the continued downward movement as the USD-CNH and USD-CNY continued to advance. The U.S. dollar rose against China’s Yuan CNH= CNY= on Monday and held steady after hitting a 13-month high against a basket of six major currencies. But Gold seems to have found some floor as equity market suffers from Turkish crisis which has affected greater part of European markets. Asian shares fell on Monday and the euro hit one-year lows against the dollar as a renewed rout in the Turkish lira drove demand for safe havens assets, including the U.S. dollar, Swiss franc, and yen.
Precious Metals Lack Demand As Investors Flock To USD, Swiss Franc, and Japanese Yen
The Turkish currency had plunged to a new record low on worries over President Tayyip Erdogan’s influence over the economy and worsening relations with the United States. However, the market waits for more details on economic action plan from Turkey which Finance Minister Berat Albayrak said will be implemented starting today. But so far no news has hit market regarding the economic action plan.
China’s central bank on Friday said it would maintain its prudent and neutral monetary policy to ensure ample liquidity and keep the Yuan largely stable after the currency earlier this month hit a 14-month low versus the dollar amid ongoing Sino-U.S. trade tensions. U.S. dollar, in which precious metals are priced has benefited from recent global political and trade tensions, while the bullion market has not despite being widely seen as a safe-haven asset. Spot silver market continues to face bearish influence and as of writing this article spot silver XAGUSD is trading at $15.25 an ounce down 0.36% on the day.
Oil prices inched up on Monday as U.S. sanctions against Iran pointed towards a tighter market, although concerns over slowing economic growth amid global trade tensions kept a lid on gains. The United States has started implementing new sanctions against Iran, which from November will also target the country’s petroleum sector.
With U.S. sanctions on Iran back in place … all eyes have been on the impact on crude oil exports from that country. While maintaining global supply might be very challenging, the U.S. is doing its bit to increase production, with data showing drilling activity is continuing to rise. U.S. energy companies last week added the most oil rigs since May, adding 10 rigs to bring the total count to 869, according to the Baker Hughes energy services firm. That was the highest level of drilling activity since March 2015. Also potentially weighing on oil markets are signs of slowing economic growth and fuel demand growth, especially in Asia’s large emerging markets. As of writing this article, WTIUSD is trading at $67.83/b down 0.59% on the day.
This article was originally posted on FX Empire
