Precious metals saw a decline in price action during Asian and early European market hours today as risk appetite returned to the global market following 2019’s worst weekly declines. While Asian markets saw mixed price action in key markets it was clear that risk appetite was slowly building up and European equities got an additional boost on news from the weekend which hinted that top-level management board of Deutsche Bank and Commerzbank have agreed to meet and discuss the possibility of a merger. These factors led to a healthy demand for risk assets in global forex and equity markets diminishing demand for safe-haven assets. Gold and Silver are two of the most preferred safe-haven assets in the global market owing to their status as precious metals.
Cheap USD Helped Limit Decline
Precious metals are by default considered to be relatively immune to the inflationary market scenarios and see high demand when the market faces a high level of volatility on account of major political events and economic uncertainties. Given the fact that the market is just rebounding from the worst weekly decline of the year, risk assets seem well supported decreasing demand for precious metals. But given the current scenario where the price of precious metals is near yearly lows and USD – the currency in which they are denominated is also week in the market, precious metals saw increased demand in the Asian market from emerging economies which saw dovish equity performance today on cues from Wall Street and this helped limit further decline in price action.
As of writing this article, spot gold XAUUSD is trading at $1295.04 per ounce down by 0.26 on the day, while US gold futures GCcv1 were trading at $1294.60 per ounce down by 0.36% on the day. Meanwhile, spot silver XAGUSD is trading at $15.29 per ounce down by 0.23% on the day. Crude oil price rebound in the global market today as Saudi Arabia officially confirmed the reduction of crude output for the month of April. According to a report published on the CNBC website, Saudi Arabia plans to reduce the output for April by less than 7 million bpd keeping output well below the target of 10 million bpd. OPEC+ group’s production and supply cut continued to underpin crude oil bulls in the long term. As of writing this article, spot US crude oil WTIUSD is trading at $56.41 per barrel up by 0.98% on the day.
This article was originally posted on FX Empire