Gold Prices Gain Amid Italian Turmoil -
Gold prices gained on Wednesday amid political turmoil in Italy. Investors fear another Italian election, which looks likely to take place as soon as August, might serve as a de facto referendum on the country’s membership in the European Union. Gold, seen as a safe haven, often gains from political turmoil. Meanwhile, the events in Italy also sent the dollar to a 10-month high versus the euro. The U.S. dollar index that tracks the greenback against a basket of six major currencies last stood at 94.81, up 0.48%. The dollar index climbed to this year’s high at 94.43 on Monday after news emerged that the U.S.-North Korea summit is now back on track. Dollar-denominated assets such as gold are sensitive to moves in the dollar – a gain in the dollar makes gold more expensive for holders of foreign currency and thus decreases demand for the precious metal. Investors’ attention are likely to turn to the U.S. inflation data due later this week for clues about future interest rate increases, as higher U.S. interest rates make non-yielding gold less attractive.
Oil Prices Dip On Growing Supplies -
Oil prices edged down on Wednesday morning in Asia as expectations that Saudi Arabia and Russia will pump more crude weighed on the market. Saudi Arabia, de-facto leader of the Organization of the Petroleum Exporting Countries (OPEC), as well as top producer Russia have discussed raising oil production in the second half of the year by some 1 million barrels per day (bpd) to make up for potential supply shortfalls from Venezuela and Iran. U.S. sanctions against Iran, which produces 4% of global oil supplies, will likely cause shortages later this year when trade restrictions take effect. Production in Venezuela has also plunged to its lowest level in decades due to its ongoing economic crisis. OPEC is due to meet in Vienna on June 22 to come up with a plan to counter the shortfalls. This could mean an early exit from the agreement to curb oil production, which OPEC as well as a group of non-OPEC producers led by Russia started in 2017 to boost oil prices and clear a supply glut.
Gold prices gained on Wednesday amid political turmoil in Italy. Investors fear another Italian election, which looks likely to take place as soon as August, might serve as a de facto referendum on the country’s membership in the European Union. Gold, seen as a safe haven, often gains from political turmoil. Meanwhile, the events in Italy also sent the dollar to a 10-month high versus the euro. The U.S. dollar index that tracks the greenback against a basket of six major currencies last stood at 94.81, up 0.48%. The dollar index climbed to this year’s high at 94.43 on Monday after news emerged that the U.S.-North Korea summit is now back on track. Dollar-denominated assets such as gold are sensitive to moves in the dollar – a gain in the dollar makes gold more expensive for holders of foreign currency and thus decreases demand for the precious metal. Investors’ attention are likely to turn to the U.S. inflation data due later this week for clues about future interest rate increases, as higher U.S. interest rates make non-yielding gold less attractive.
Oil Prices Dip On Growing Supplies -
Oil prices edged down on Wednesday morning in Asia as expectations that Saudi Arabia and Russia will pump more crude weighed on the market. Saudi Arabia, de-facto leader of the Organization of the Petroleum Exporting Countries (OPEC), as well as top producer Russia have discussed raising oil production in the second half of the year by some 1 million barrels per day (bpd) to make up for potential supply shortfalls from Venezuela and Iran. U.S. sanctions against Iran, which produces 4% of global oil supplies, will likely cause shortages later this year when trade restrictions take effect. Production in Venezuela has also plunged to its lowest level in decades due to its ongoing economic crisis. OPEC is due to meet in Vienna on June 22 to come up with a plan to counter the shortfalls. This could mean an early exit from the agreement to curb oil production, which OPEC as well as a group of non-OPEC producers led by Russia started in 2017 to boost oil prices and clear a supply glut.
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