11.04.2016 - The potential for growth of oil significantly reduced
The price of gold showed growth at the end of last week and continues to rise along with other defensive assets. The main event in the next weeks will be the Fed meeting, at which probably will take a decision to maintain the current monetary policy settings unchanged, which is positive for gold. Today, the dynamics of trading can affect the speech of US Treasury Secretary Jack Lew (12:30 GMT). Support for the precious metal in the near future may become a drop on the stock markets. Inflows into funds backed by gold declined and given the expected rise in inflation in the United States and the rise in interest rates this year, we keep negative medium-term outlook for gold.
The price of futures for Light Sweet crude oil showed strong growth but is corrected at the beginning of the trading week. Reducing the number of drilling rigs in the world supports the price of oil. In addition, on the market renewed speculations about a meeting of representatives of a number of oil producing countries in Qatar on 17 April. We expect the absence of consensus, which can really affect the imbalance of supply and demand, and forecast a drop in oil prices after the meeting. The excess of oil supply on the market and growth of stocks will continue to put pressure on oil in the near future, but in the second half of the year the situation may change.