01.07.2016 - Demand for gold remains high

The price of gold has resumed growth against the backdrop of publication weak statistics on the China’s manufacturing PMI in Caixin, which fell in June to 48.6, which is 0.6 less than the previous figure. This fact reinforces the likelihood of additional measures to stimulate economic growth in China. In addition, the head of the Bank of England Mark Carney stated about the possible reduction of interest rates in the summer to support the economy because of the exit from the EU. The high level of uncertainty on the stock and foreign exchange markets will support the demand for defensive assets. We anticipate continued growth of gold in the medium term.

The price of Light Sweet crude oil could not continue to grow and corrected on the background of the lack of incentives for continued upward price movement. It is worth noting that today investor sentiment has improved with respect to oil, despite the weak data on manufacturing activity in China, which continues to decline. Investors continue to monitor the data on the volume of production in the OPEC countries and the United States, and according to analysts, the excess supply of oil will remain in the near future. Due to this fact, as well as on the background of the expected slowdown in the EU economy, we expect a drop in oil prices in the near future.

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