Commodities: Latest Trump comments help lift gold higher as risk off theme takes hold

The latest round of comments from the White House were enough to push safe haven assets higher on Wednesday as the US President threatened to allow a US government shutdown if he did not obtain sufficient funding to build a wall along the US/Mexico border.

In addition to this, further threats were made to terminate the NAFTA (North American Free Trade Agreement) treaty with Mexico and Canada after talks between the three countries failed to bridge differences.

This latest round of domestic uncertainty weighed on general dollar strength and helped push safe haven gold higher with the December contract up 0.19% to $1,293/Oz. by 1700 BST.

On recent gold moves, FOREX.com analyst Fawad Razaqzada said, "There can be an argument made for a bearish view on gold at this stage. If the dollar were to come back due to short covering and given the rally in U.S. stocks we saw yesterday, the (dollar) buck-denominated and safe haven metal could fall out of favour."

Gold was also buoyed by new US North Korea-related sanctions, targeting Chinese and Russian firms and individuals for supporting Pyongyang's weapons programmes.

Among the other precious metals, spot platinum was slightly lower, dipping by 0.01% to $978/Oz. and palladium 0.2% lower to $930/Oz.

Energy markets got a boost on Wednesday after US crude oil inventories showed an eighth straight week of declines, coming in at 3.3m barrels.

"Oil inventories continue their downward trend despite a significant increase in crude oil imports this week," said Andrew Lipow, president of Lipow Oil Associates in Houston, adding, "it continues to wait to see more confirmation from around the world that inventories are indeed declining."

WTI (West Texas Intermediate) crude for December delivery was up 1% on the day to $48.70/barrel while October benchmark brent was also higher to $52.46/barrel.

Base metals saw spot copper trading at it's highest level for 2 years to $6,573/tonne with iron ore up 1.52% to $589/ tonne.

In a note earlier in the day, UniCredit Bank AG said, "Up at these higher price levels though, the metals are likely to have to absorb more selling, so choppy trading should be expected. Key will be how well dips are supported."

On the agricultural front, wheat prices edged higher with the September Paris Milling contract up 1.16% to 153.75 euros/ tonne prompting one Euronext trader to comment, "The market needs a pause after the continuous fall but fundamentally the bearish pressure from the large global supplies remains."

Other agricultural contracts saw November soybeans lower to $9.38/bushel, September corn down 0.75% to $3.44/bushel and December cotton up to $0.6890/lb.