05.01.2016 - Tension in the Middle East led to a rise in oil prices
The price of gold yesterday showed growth against the background of geopolitical tensions in the Middle East, which was caused by the decision of Saudi Arabia to break off diplomatic relations with Iran after the attack on the embassy in Tehran. At the same time, investors' concerns raised in connection with the reduction in the stock market of China, which was caused by weak data on manufacturing activity in the country, which continued to decline. Demand for gold remains elevated before the celebration of New Year in China, which will be held in early February. It is worth noting that despite the recent growth, quotations continue to be under the pressure of tightening monetary policy in the US, in the coming months may lead to a further fall in prices to the level of $ 1000 per troy ounce.
The price of Light Sweet crude oil yesterday showed a rise on news of the breaking of diplomatic relations between Saudi Arabia and Iran, which could lead to disruptions of oil supplies in the region, but we forecast the tensions will decrease in the near future. In addition, the negative impact on the price of oil has an expected increase in the supply of oil from Iran in connection with the lifting of sanctions against the country. Weak data on manufacturing activity in China and the US also lead to a decrease in oil prices. We maintain a medium-term negative outlook and expect a downward price movement in the near future.