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GOLD & CRUDE OIL TALKING POINTS:

  • US-China trade war escalation setting risk-off tone to trading week start
  • Gold prices weighing clashing influence of bond yields and the US Dollar[1][2]
  • Crude oil prices[3] appear vulnerable, may extend decline from April high

Gold prices saw another intraday foray to the upside fizzle out into the close on Friday. The metal found early support as markets weighed up an increase in US tariffs on imports from China, souring sentiment and weighing on bond yields. That bolstered the appeal of non-interest-bearing alternatives.

The much-anticipated initial public offering of shares in Uber seemed to redirect investors’ attention however. The company popped in its first few hours on the New York Stock Exchange, which seemingly triggered a risk-on pivot. While Uber would subsequently reverse to close lower, broader sentiment held up.

Crude oil prices largely echoed swings in the equities space, with the WTI benchmark tracking S&P 500[4] futures lower through the first part of the day and recovering alongside them in the afternoon. Data showing the number of active US oil rigs matched a one-year low last week seemed to go unnoticed.

US-China trade war escalation seems likely to remain in focus as the new trading week begins. A dour mood is prevailing[5] in early Asia Pacific hours, setting the stage for a risk-off session. This may see oil on the defensive while gold probes the topside, at least until haven flows revive US Dollar demand.

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