02.03.2016 - Improved sentiment on the stock markets weakened demand for gold

The price of gold could not continue the positive dynamics and started to decline against the strengthening of the US dollar and improving macroeconomic data in the US. Thus, the manufacturing PMI rose to 49.5 in February from 48.2 in the previous month. At the same time, construction spending in the US increased by 1.5% and reached its highest level since 2007. Investors expect the publication of an important report on the US labor market for February on Friday, which will affect market expectations on the timing of the Fed raising interest rates. We forecast a drop in gold prices in the medium term, but in the near future there is a limited probability of growth.

The price of futures for Light Sweet crude oil yesterday showed growth against the backdrop of expectations that the reduction in reserve requirements for Chinese banks by 0.5% to 17.0% will support oil demand. In addition, a positive impact will have news on the accident on the pipeline in Nigeria, which will not be restored until April. As a result of this event oil supply will decrease by 250 thousand barrels per day. Despite these events, we expect the resumption of the negative dynamics of oil prices due to increased volume of supplies from Iran. Our medium-term outlook remains negative with a potential reduction by 20% in the coming weeks.

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