Risk appetite in equity and forex markets and positive US dollar in the broad market caused precious metals to decline in broad market.
Precious metals today saw sharp downside move as market scenario returned to normal following an eventful month. Given the fact that there is no major market altering events in the week ahead and the fact that market is set to see a week full of first tier macro data updates, investor sentiment is positive with plenty of risk appetite across all major global markets. Further US Dollar gained strength in the broad market following upbeat US NFP data and ISM Manufacturing PMI released last Friday. The dollar has retained its strength across Asian and early European market hours which also added to precious metal market bears.
Brent Crude Climbs Above $60 Per Barrel
Positive US dollar in broad market is always bearish for greenback denominated precious metals. A higher value of USD discourages participants from emerging markets owing to higher exchange rate which further reduces activity in the precious metals market. Risk appetite is currently very high in broad market as headlines last week hinted that China & U.S. managed to come to an agreement on many key issues which improved chances of a trade deal between two nations. As of writing this article, spot gold XAUUSD is trading at $1310.92 per ounce down by 0.51% on the day while US gold futures GCcv1 was trading at $1314.90 per ounce down by 0.54% on the day. Meanwhile, spot silver XAGUSD is trading at $15.75 per ounce down by 0.92% on the day.