10.03.2015 - Investment funds reduce holdings of gold

The price of gold continues to fall against the strengthening of the US dollar after the release of positive data on the labor market in the country. Investment funds have reduced their investments in gold. Despite a steady downward trend, the potential for further fall decreasing in connection with the approach of quotations to the cost of production of gold 1000-1100 dollars per troy ounce. Investors are awaiting tomorrow's statistics on industrial production in China, as well as news from the summit of Eurozone finance ministers, at which is discussed the Greek crisis. We continue to expect the resumption of growth in gold prices in the medium term, but expect the signal to open long positions.

The price of Light Sweet crude oil continued to decline amid speculations on the limited storage capacity of oil in the United States. It is worth noting that the growth in oil production in the United States persists in spite of the reduction in the number of drilling rigs to its lowest level since June 2011 – 923 rigs. The General Secretary of OPEC Ablalla al-Badri said that the countries of the Organization should not subsidize expensive production of shale oil in the world. According to our estimates the excess oil which remains on the market will lead to further drop in prices to the levels of 45 and 40 dollars per barrel, but in the end of the year, the situation may change. Our medium-term outlook for oil remains negative and we recommend holding short positions.

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