Gold prices rose on European markets on Wednesday to resume gains that were halted for two days on correction and profit taking from a 14-month high, on the back of the US dollar's decline ahead of major US inflation data, especially as investors' demand on the metal as a safe haven rose amid fears of the US-China trade war.

As of 10:27 GMT, gold prices rose by 0.7% to trade at $1,335.55 per ounce from the opening level of $1,326.57, and recorded a high of $1,338.37and a low of $1,326.02.

Yesterday, gold prices lost 0.1%, the second consecutive daily loss, with corrections and profit taking from a 14-month high of $1,348.26 per ounce.

The dollar index fell more than 0.1% on Wednesday, continuing its losses for the second day in a row, approaching the lowest level in two months, reflecting the continued decline of the dollar against a basket of major and secondary currencies.

The drop in dollar levels comes as the Federal Reserve is likely to cut interest rates this year, as US President Donald Trump's administration continues to pressure monetary policy makers to cut interest rates to support the administration in its trade wars against several countries.

These prospects also increased after the weak economic data from the United States, which increased the signs of global economic slowdown in the second quarter of this year.

According to the FedWatch tool of the CME, the market is pricing the possibility of a US interest rate cut of around 78% in July and about 97.1% for price cuts by December.

In order to reassess those possibilities, investors are anticipating major US inflation data later in the day, which in case of a negative data release will reinforce those odds and vice versa.

Investment demand has rekindled the precious metal as a safe haven, amid fears of a worsening trade war between the United States and China.

US President Donald Trump on Tuesday defended the use of tariffs under his trade strategy from one side, and China has vowed a tough response if US tariffs on Chinese goods are raised again amid ongoing negotiations between the two countries for a comprehensive trade deal.

Gold holdings with SPDR Gold (Trust The largest global gold-backed index fund) fell yesterday by 0.24 metric tons to bring the total down to 756.18 metric tons, the lowest level this month.

Bitcoin surged in spot trading today to resume its gains that were temporarily halted yesterday, in a fresh attempt to trade above the psychological barrier of $8,000, but still need more positive news to resume the bullish market run.

As of 08:27 GMT, at Bitstamp, Bitcoin is trading around $7,955, up by $40, or 0.5%, from the opening price of $7,915, with the highest at $8,089, and the lowest at $7,821.

Yesterday, Bitcoin lost 1.3% due to corrections and profit taking, following a rise by 5.1%, the highest daily gain since May 26.

The total market value of cryptocurrencies rose on Wednesday by about $4 billion to a total of $258 billion, with the recovery of most of the major currency prices in the crypto market.

At the moment, Bitcoin is waiting for more positive momentum to resume the bullish market run, to trade above the psychological barrier of $8,000, but these attempts still need more positive news, which helps to accelerate the levels of investment demand to resume the bullish market run.

The bullish market run has dominated the largest cryptocurrency in the world since early April, to record a year high of $9,096 per unit.

Some crypto market experts believe that a possible Facebook announcement over the next few days about its digital currency project will have a significant impact on prices, whilst if the project is a disappointment we may see an appropriate price correction that could be used as an opportunity to buy.

 If the details of the project are positive above market expectations, we will see a rise in most of the key cryptos prices, but it is unlikely to repeat the sharp rise as in late 2017.

 Meanwhile, in a joint statement, G20 finance ministers and central bank governors said "technological innovations, including basic crypto assets, can provide great benefits to the financial system and the global economy."

At the same time, "they warned regulatory authorities against the need to control the risks in crypto assets, especially those related to investor protection, anti-money laundering and terrorist financing.

Oil prices fell on Wednesday, extending their losses for the third day in a row, close to a five-month low on the unexpected rise in US crude inventories, according to preliminary data from the American Petroleum Institute (API), in addition to expectations of a weak global demand for oil during this year.

As 09:00 GMT, US crude fell to $51.80 a barrel from the opening level of $53.01, with a high of $53.02 and a low of $51.46.

Brent crude fell to $60.60 a barrel from the opening of $61.65 with a high of $61.68 and a low of $60.29.

US crude lost 0.7% yesterday, and Brent fell 0.5%, the second consecutive daily loss, on the renewed fears of a global recession.

In preliminary data, the American Petroleum Institute (API) announced yesterday that the country's commercial inventories rose by 4.9 million barrels in the week ending June 7, the second weekly increase in a row, contrary to experts' expectations of a drop by 0.5 million barrels.

According to the data, total US commercial inventories rose to 482.4 million barrels, the highest level since July 2017, in a negative sign of demand levels in the world's largest oil consumer.

Traders are looking for official data on commercial stocks and production levels later in the weekly report of the US Energy Information Administration (EIA), and expectations are for inventories to fall by about 1.0 million barrels.

The US Energy Information Administration has cut its forecast for world oil demand growth in 2019 as well as crude production in its monthly report released Tuesday.

The agency cut global demand growth by 160,000 barrels per day to 1.22 million bpd and cut production expectations by 140,000 barrels to 12.32 million bpd.

On the other hand, the UAE Energy Minister Suhail Al Mazrouei said on Tuesday that OPEC members are about to reach an agreement on the continuation of the global supply cut deal until the end of this year.

The Organization of the Petroleum Exporting Countries (OPEC) is due to meet with its allies, led by Russia in late June or early July, to discuss production policy and decide on a 1.2 million barrel supply reduction agreement that expires on June 30.

US dollar fluctuated lower in a tight range during the Asian session, to bounce in the second session from its highest since May 31 against the Japanese Yen,following economic data released by the Japanese economy, the third largest economy in the world and on the threshold of developments and economic data expected today by the US economy, the world's largest economy.

As of 05:51 GMT, USD/JPY fell 0.06% to 108.46 compared with the opening levels of 108.52 after a low of 108.44 and a high of 108.57.

We followed the Japanese economy reveal of its inflation data, with the release of the producer price index, which is a preliminary indicator of inflationary pressures that showed a contraction by 0.1% versus April's 0.4% growth, worse than expectations of a zero rate, while the annual reading for the same index showed that growth slowed to 0.7% in line with expectations versus 1.3% in the previous annual reading for April.

We also followed the reading of the Machinery Demand Index, which showed that growth accelerated to 5.2% from 3.8% in March, in contrast to expectations of a 0.8% decline. While the annual reading of the index increased by 2.5% compared to a decline of 0.7% in the previous annual reading for March, and also exceeded expectations of a widening of the decline to 5.3%.

Japanese Prime Minister, Shinzō Abe, yesterday expressing his confidence in the Bank of Japan, explaining that he will leave the monetary policy decision to the Japanese central bank's jurisdiction, adding that if the risks to economic growth are high, the government will implement flexible macroeconomic policies. In the same context, Japanese Minister of Finance, Tarō Asō, also noted yesterday that there is no change in plans to raise the sales tax by next October.

On the other hand, the markets are currently looking for the US economy to release inflation data with the release of the consumer price index, which may reflect a slowdown in growth to 0.1% compared to 0.4% in April, while the core reading of the same index may show growth acceleration to 0.2% Compared to 0.1%. The annualized reading may show growth slowing to 1.9% versus 2.0%, while the core annual reading may reflect a 2.1% growth stability.