03.05.2016 - OPEC increased its production to its highest level since 1989

The price of gold shows a positive dynamics in recent days within which reached the level of 1300 dollars per troy ounce. Support for prices was the decision by the Fed not to raise interest rates in April, as well as reduce of the likelihood of the Fed tightening monetary policy in June due to the deterioration of macroeconomic statistics in the US. Support for the price of gold can be a significant correction on the stock markets, which will increase the demand for the precious metal as a defensive asset. Our medium-term outlook remains negative, but the current growth can continue in May.

The price of futures for Light Sweet crude oil fell on news on the growth of oil production in the OPEC. Thus, according to data provided by Bloomberg, the volume of cartel production rose in April compared with March, to 484 thousand barrels a day to 33.217 million barrels a day, which was the highest figure since 1989. At the same time, production in Iran increased to 3.5 million barrels per day, according to previous statements made by the representatives of the Islamic Republic, the production growth will continue to the level of 4.0 million barrels per day. The growth of production in the Middle East offsets the likely decline in US production. At the moment, there is a significant probability of correction on the commodity markets, after unreasonably strong speculative growth, but in the second half of the year expectations of balancing the supply and demand on the market will support the growth of quotations. We forecast a drop of oil in May.

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