12.09.2016 - Drilling activity in the US continued to grow

The price of gold declines after President of the Federal Reserve Bank of Boston Eric Rosengren said the need to tighten monetary policy in the United States, in order to avoid overheating of the economy. This statement has led to an increase in the dollar and reduced the attractiveness of gold compared with assets that generate interest income. On the other hand, the Fed raising interest rates may be a trigger for the start of decline in US stock markets after a long consolidation, which in turn will increase the interest in defensive assets. Given the expectation of negative dynamics on the stock markets and the growth in physical gold consumption in India and China due to the holiday season, we expect the price increase to the levels of 1400-1430 dollars per troy ounce in the medium term.

The price of Light Sweet crude oil resumed fall after could not continue the growth that was caused by the reduction of inventories in the US, which was the result of a tropical storm in the Gulf of Mexico that has led to the disruption of oil supplies. On Friday was published statistics by service company Baker Hughes according to which, the number of active oil rigs rose by 7 to 414. This fact, together with an increase in the volume of oil production in the OPEC countries and Russia, will put pressure on the price of oil. We expect the lack of results from the negotiation of a number of major oil producers at the energy summit in Algeria that will be held on September 26-28. Our medium-term outlook remains negative.

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