Gold Prices Up, Easing Trade Concerns Soften USD + Commodities

$GLD, $SLV, $USD, $PLAT, $PALL, $USO, $OIL, $SOY, $CORN, $WEAT

In Asia

Asian stocks extended gains Friday thanks to Wall Street marking all-time highs, as investors believe that the latest exchange of tariffs between the United States and China may be less damaging than initially feared.

And, despite growing anecdotal reports from companies on both sides of the Pacific that the trade dispute is starting to impact their operations, the outlook for corporate profits remained solid in many markets on the back of strong global growth, keeping equity valuations relatively attractive.

• Us Fed seen raising interest rates at 25-26 September FOMC meeting
• Palladium near 5-month high tapped Wednesday
• Spot gold XAU= was + 0.2% at 1,203.86 oz, as of 0347GMT, after rising 0.5% in Thursday’s session.
• US gold futures were up 0.2% at 1,210.20 oz.
• Gold dropped about 11.6% from a high in April on threat of rising US interest rates.
• The risk in gold is flattening, but that is taking wind out of the safe-haven appeal of USD For gold to break $1,210, we need to see USD weakening Vs the emerging market currencies as well as EUR
• .DXY hanging near a 7-week low Vs a basket of peer currencies.
• Oil prices slip after US President Donald Trump called on OPEC to “get prices down now!” ahead of a meeting of major Crude Oil exporters.
• OPEC and other producers, including Russia, meet Sunday in Algeria to discuss how to allocate supply increases to offset the loss of Iranian barrels due to US sanctions.
• US Crude Oil stockpiles fell for a 5th week running to 3.5-year lows in the week to 14 September, the Energy Information Administration (EIA) said Wednesday.

Earlier this week, Washington imposed 10% tariffs onChinese goods worth $200-B, while China retaliated with levies on about $60-B worth of US  goods at scaled-back rates.

Investors have been buying USD believing that US has less to lose from the dispute, but a spot of weakness in USD indicated that worries over trade tensions have eased as the tariffs were seen to be at lower marks than feared.

Investors are awaiting next week’s FOMC meeting, the Fed policy makers are widely expected to raise benchmark interest rates and shed light on the path for future rate hikes.

Recent Fed commentary has implied a steady pace of tightening so anything that calls that into question will be positive for gold.

Gold has been stuck in a range between 1,215 and 1,187 for the past 3 weeks, with investors looking for a technical breakout on either side for further moves.

The market gives the outward appearance of remaining range-bound and has not yet done enough on the upside to alter this appearance. But, short term prices would strengthen to1,211 and a break above could see 1,221.

Among other precious metals, spot silver XAG= rose 0.8 to 14.32 oz, Palladium XPD= climbed 0.2% to 1,036.50, hanging near a 5-month high of at 1,041.70 marked Wednesday.

Platinum XPT= gained 0.3% to $823.40, after hitting its highest mark since 13 August at 826.40 in the prior session

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Have a terrific weekend.

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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