05.09.2016 - Gold rose amid falling probability of the Fed raising interest rates
The price of gold showed growth against the publication of less strong labor market statistics in the United States than the average forecast. Thus, the unemployment rate was 4.9%, which is 0.1% more than the forecast, while the number of non-farm payrolls increased by 151 thousand in comparison with the expected growth of 180 thousand. This fact has led to a decrease in the probability of the Fed raising interest rates in September this year, which is positive for the gold price. On the other hand, the probability of the correction on the stock markets remains high, leading to increased interest in defensive assets such as gold. Today, in the US is a holiday and activity will be low. Our medium-term outlook remains positive with a potential target at 1400 dollars per troy ounce.
The price of Light Sweet crude oil is corrected upwards after a strong fall last week. On Friday, the support for prices was the statement of Russian President regarding the support of the freezing of oil production, but this effect was short-lived. On the other hand, drilling activity in the US continued to grow during the 9 weeks of the last 10. It is worth noting that the rise in prices stimulates an increase in US oil production, which lead to strengthening of market imbalance. This week, investors will continue to monitor the volume of inventories in the United States. At the summit of G-20, IMF chief Christine Lagarde said about the worsening forecasts on global GDP growth, which also puts pressure on the quotes. We maintain a negative outlook and growth is possible only within the correction.