16.12.2014 - Oil continues to fall
The price of gold continued to decline and broke the psychologically important level of $ 1200 per troy ounce. The reason for the drop in prices was the strengthening of the dollar, as well as the expectation of the Fed's statement on monetary policy which may hint at an earlier rise in interest rates and get rid of the language that indicates that rates will remain at current levels for a long time. Statistics on industrial production in the US, which grew by 1.3% compared with an expected 0.8% has also led to a reduction of concerns about the prospects for the US economy. Given the probable fall on the stock markets, we maintain a positive medium-term outlook for gold.
The price of Light Sweet crude oil has continued to fall in connection with the statement of the People's Bank of China to reduce the growth rate of GDP in 2015 to 7.1%, which is 0.3% less than this year. In addition, today was published statistics on China's manufacturing PMI, which fell by 0.5 in December to 49.5. Investors expect the Fed decision on monetary policy. In the case of tightening, oil prices will accelerate the fall. UAE Minister of Energy stated that oil production quotas will not be reviewed even if the drop in prices of oil to $ 40 per barrel. We recommend holding short positions in the oil and keep the medium-term negative outlook.