05.08.2016 - Gold rose after a decline in interest rates of the Bank of England
The price of gold has shown strong growth after the Bank of England announced the reduction of the key interest rate from 0.50% to 0.25%. In addition, the country's central bank will buy government and corporate bonds within the program of quantitative easing. By reducing the interest rates of the central banks, investment attractiveness of gold is rising. Today, the dynamics of trading will affect the labor market data in the US (12:30 GMT). Positive statistics will increase the likelihood of the Fed raising interest rates this year, which will be negatively displayed on the gold price. Our medium-term outlook remains optimistic due to the expectation of reduction on the stock market.
The price of Light Sweet crude oil is corrected upwards after a long fall. Investors are taking profits before the publication of an important labor market report in the US that will lead to increased volatility. Despite the slight decline in oil production in the US and the rise in gasoline inventories, excess oil supply on the market is likely to continue in the near future, which will put pressure on the quotes. Additional pressure on the black gold has a worsening outlook for global growth and increased levels of oil production in the OPEC. We maintain our medium-term negative outlook, and expect the resumption of decline in the near future.