Friday gold moves suggest that a rout from risk has been curbed and risk appetite increases again. Investors take the profit from the upsurge in the middle of the week amid political instability in Washington.
Demand for defensive assets has risen sharply since it has been known that US President Donald Trump asked former FBI director James Comey to suspend an investigation into Russia’s relations with Russia’s national security adviser Michael Flynn.
On Wednesday, the US Department of Justice appointed Robert Mueller as a special adviser who would monitor the investigation of Russia’s alleged interference in the US presidential election campaign in 2016.
The US dollar index, which shows the purchasing power of the dollar to the trade-weighted basket of six major
currencies, declined by 0.15% to 97.62, approaching the six-month low of Thursday’s 97.28.
Dollar weakness usually leads to an upturn in gold prices, which is considered as an alternative asset, and makes the dollar’s commodity prices cheaper for holders of other currencies.
At present, the OPEC group is discussing the possibility of increasing the volume and extending the deadline for reducing oil production ahead of an official meeting in Vienna next week, Reuters reported citing “informed sources.”
The end of the two-day meeting of the OPEC Economic Commission was scheduled for Thursday, but will end only on Friday evening after the planned talks with non-OPEC countries, Reuters writes.
“We have not yet agreed on the final scenarios,” one source said.
According to the latest information, Saudi Arabia and Russia are in favor of extending the agreement for another nine months, but this decision should still be approved by the other parties to the agreement at May 25 meeting.
The day before, the Saudi side expressed its readiness to act as the coordinator for the OPEC + deal and, more importantly, to compensate at its own expense possible violations of other participants.
Brent crude oil has risen in price by 1%, the price has already exceeded $53 per barrel. The cost of oil grade WTI climbed to $50 per barrel.