11.11.2014 - The strengthening of the dollar has led to the fall on commodity markets
The price of gold has resumed a downward movement after the correction at the end of the last week, which was caused by the fixation of positions on the US dollar. It is worth noting that the US labor market continues to show positive results, which increases the probability of more early increase in interest rates of the Fed. In addition, a negative for gold was the data on the growth of China's trade surplus to 45.4 billion in October, against the previous figure of 31.0 billion. At the moment, quotations are consolidated near the level of $ 1150 per troy ounce and can reach the marks of 1100 and 1120. It is worth mentioning that the average production cost of gold is around $ 1100 per troy ounce. We keep a positive outlook for the medium-term, but expect falling prices in the near future.
The price of the Light Sweet crude oil, after rising to a level of $ 80 per barrel at a weaker dollar and fixing positions, resumed the downward movement. The rate of decline was limited by the data on the growth of imports of crude oil in China, which is the second largest oil consumer after the United States. Despite this, we maintain a medium-term negative outlook due to weak oil demand in Europe and the rise in US inventories. The key event of this month will be a meeting of OPEC on November 27 at which may reduce the quota for the export of oil, but we expect that this decision will not be taken. We recommend holding short positions on oil.