03.09.2014 - Strong dollar puts pressure on commodities

The price of gold has fallen sharply against the strengthening of the dollar index to a maximum value since July of 2013. The reason for the strengthening of the American currency became expectations of launching additional measures to deal with low inflation in the euro area, as well as the fall of the British pound in relation to possible exit of Scotland from the United Kingdom after the a referendum on the independence of the country on 18 September. Demand for gold remains low, but may increase due to the wedding season in India. Demand for the metal is also supported by the tense geopolitical situation caused by the events in Ukraine. We maintain our positive medium-term outlook for gold, but admit the possibility of further price drops in the near future.

The price of oil resumed its decline due to the strengthening of the dollar, the end of traveling season in the United States, as well as weak data on manufacturing activity in China and the eurozone. In addition, it is worth noting that in Libya continues the increase of oil production, and demand in Europe remains relatively weak. Traders continue to monitor the situation in Ukraine, which may lead to interruptions in the supply of gas to Europe. Tomorrow the course of trading will be affected by data on oil and petroleum products in the United States, and statistics on the labor market in the United States. We maintain a medium-term negative outlook for oil.

RISK WARNING: Trading of complex financial products, such as Stocks, Futures, Foreign Exchange ("Forex"), Contracts for Difference ("CFDs"), Indices, Options, or other financial derivatives, on "margin" carries a high level of risk, and may not be suitable for all investors. The possibility exists that you could sustain a loss of some or all of your initial investment and, therefore, you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading these markets, and seek advice from an independent financial advisor if you have any questions or doubts. Please carefully read our full "Risk Disclosure" and "Risk Disclosures for Financial Instruments & Investment Services". FXFINPRO Capital is the trading name of PFX Financial Professionals Limited, a limited liability company formed under the laws of Cyprus, registered with the Registrar of Companies in Nicosia, Cyprus, under nr. HE 237840 and regulated by the Cyprus Securities and Exchange Commission with license number 193/13.