The price of gold has strengthened yesterday at the beginning of the session due to lowering interest rates in China by 0.25% to 2.5% for deposits and to 5.35% for loans. Such a step of the People's Bank of China has led to the expectation of reducing the risk of deflation in the country, which contributes to the demand for gold. Strengthening of the US dollar caused by the statistics on manufacturing activity, which weakened only in connection with a strike at one of the ports of the country, weakened the gold price. Volatility of gold in the near future will be reduced and analysts expect the release of statistics on the US labor market on Friday. In case of improving data from the US, the price of gold may fall. We maintain a positive medium-term outlook for gold.
The price of Light Sweet crude oil slightly strengthened on the news on the growth of China's manufacturing PMI to 50.7. In addition, the market reacted positively to information on reduction of the interest rates of People's Bank of China, which should support the country's economic growth, which is the world's second largest oil consumer after the United States. At the same time, a number of drilling rigs in the US decreased by 33, which was lower than projections of analysts. Oil production continues to grow in the United States, Saudi Arabia, Iraq and Libya. Given the oversupply of oil on the market, we maintain a medium-term negative outlook and recommend holding short positions.