Commodities: Safe-haven gold likely to remain supported going forward

Gold is front and centre on traders' charts with some picking the safe-haven asset will remain supported going forward thanks to a platter of political risk in both UK and Washington, as well as the global oil glut.

At 15:18 BST, on Comex, gold was up 0.58% to $1256.70 an ounce. Silver rose 0.95% to $16.73 an ounce. Copper was ahead 1.05% at 263.75 cents a pound.

Mike van Dulken, head of research at Accendo Markets, said nil-yielding gold had broken above intersecting resistance at $1,255.

This was as sterling made inroads against the greenback, and with the dollar-spot index down 0.3% to $97.297 at about 15:34 BST.

FXTM research analyst Lukman Otunuga opined that gold appeared to be glittering again.

"A weakening dollar coupled with mixed messages from policymakers on US rate hike timings supported the metal further as prices lurched towards $1258," he said.

"There is a possibility of gold venturing higher if speculations of the Federal Reserve taking action this year decline," he added.

Otunuga continued that due to Brexit developments, political risk in Washington and oil's oversupply woes stimulating risk aversion, safe-haven assets are likely to remain supported.

"From a technical standpoint, gold is currently trading within a bullish channel on the daily charts and there is a visible reluctance to break below $1,240.

"A decisive breakout and daily close above $1,260 could bring bulls back into the game."

On London Metals Exchange, three-month industrial metals were mostly ahead. Zinc rose 2.27%, aluminum added 0.16% and copper was broadly flat. Tin fell 1.28%.

Meanwhile, Nymex-priced West Texas Intermediate crude was up 0.82% to $43.09 a barrel. Intercontinental Exchange-traded Brent added 0.77% to $45.57 a barrel.

Craig Erlam, senior market analyst at Oanda, was looking ahead to the latest rig-count data from Baker Hughes.

"Brent and WTI may be higher for a second day but as it is, there's little reason to believe this is anything more than a dead cat bounce and that next week may be another painful one."

Erlam said traders were clearly unconvinced by the Opec cuts that were intended to bring inventories down to their five year average, particularly against the backdrop of rising output from the US, Libya and Nigeria.

"A clear break below $44.50 in Brent and $42 in WTI could trigger further downside for oil, with $40 being the next big test," said Erlam.

To this, Otunuga added that although WTI crude was rising, the overall sentiment towards it remained heavily bearish thanks to the supply overhang.

"From a technical standpoint, WTI Crude is under intense selling pressure on the daily charts. A technical bounce may be on the cards before prices trade back towards $42."