The price of gold continues to consolidate above the level of $ 1140 per troy ounce. The last decrease was caused by the strengthening of the dollar against the background of the victory of the Republican Party in the elections in America, giving them the opportunity to get a majority in the US Senate. The strengthening of the dollar leads to greater concern about deflationary risks than inflation, which restrains the demand for gold. It is also worth noting that the growth of US stock indexes to historical indexes negatively affect demand for defensive assets like gold. Rising volatility is expected tomorrow after publication of data on the US labor market. Fall is limited by the average level of production cost of gold near $ 1100 an ounce and in case of price reaching these levels we recommend to open long positions.
The price of Light Sweet crude oil corrected yesterday on the background of data on the US labor market, where the number of jobs in the private sector rose by 230 thousand that is 16 thousand better than the forecast. It should also be noted that data on oil reserves in the United States showed an increase by 0.5 million barrels compared with an expected growth of 2.2 million. Meanwhile, gasoline inventories decreased by 1.4 million barrels to its lowest level since November 2012. Analysts predicted that the figure will be reduced by 300 thousand barrels. Negative for oil prices remain statements of Kuwait and Iran on intention to keep the volume of oil supplies that reduces the likelihood of reducing oil production quotas of OPEC. We recall that decision by OPEC quotas will be taken on November 27. We maintain a medium-term negative outlook for oil and recommend holding short positions.