Gold prices edged down on early Asian market hours as the dollar hit a more-than-one-week high on the back of intensifying global trade tensions and economic worries in emerging markets. The yellow metal is down about 8% this year amid rising U.S. interest rates, trade disputes, and the Turkish currency crisis, with investors parking their money in the dollar, which is being viewed as a safe-haven asset.
Spot gold XAUUSD was down 0.52% at $1,195.05 an ounce as of writing this article, while U.S. gold futures had dropped 0.56% at $1199.90 an ounce. The emerging market economic crisis is making currencies very weak and benefiting the dollar, which continues to pressure gold. Currencies including the Argentine peso, Turkish lira, South African rand, Brazilian real, Indonesian rupiah and Indian rupee have suffered in recent weeks.
Gold Down on Strong USD While Crude Oil Upon India’s Decision to Buy Iranian Oil
The dollar index DXY which measures the greenback against a basket of currencies hit its highest since Aug. 24 at 95.410. Investors of precious metals are now tracked the dollar’s movements very closely as interest rate expectations are greatly weighing down the market. U.S. dollar’s strength makes gold more expensive for holders of other currencies with safe-haven demand for gold this year overshadowed by the metal’s relationship with the greenback. Spot Silver XAGUSD is currently trading at $14.30 an ounce down by 1.32% on the day.
U.S. oil prices rose on Tuesday, breaking past $70 per barrel, after two Gulf of Mexico oil platforms were evacuated in preparation for a hurricane. Anadarko Petroleum Corp said on Monday it had evacuated and shut production at two oil platforms in the northern Gulf of Mexico ahead of the approach of Gordon, which is expected to come ashore as a hurricane.
Meanwhile, one of the world’s biggest oil importers India has allowed state refiners to import Iranian oil if Tehran arranges and ensures tankers. Many international shippers have stopped loading Iranian oil as U.S. financial sanctions against Tehran prevent them from ensuring its cargoes. Mirroring a step by China, where buyers are shifting nearly all their Iranian oil imports to vessels owned by National Iranian Tanker Co (NITC), this means that Asia’s two biggest oil importers are making plans to continue Iran purchases despite pressure by Washington to cut orders. Spot Crude WTIUSD is trading at $71.16/b up 0.78% on the day.