16.07.2014 - The price of gold and oil continue to fall

The price of gold continued to decline against the strengthening of the U.S. dollar after comments from the head of FED Janet Yellen, who said earlier about the possibility of rising interest rates than was previously expected. The Fed monetary policy will depend on the macroeconomic indicators. At the moment the price is consolidating below $ 1300 per troy ounce. The demand for gold from investment funds remains stable. Despite the recent decline, we expect the price of gold to resume growth in the near future and keep medium-term positive outlook.

Light Sweet crude oil price continued to move within the downward channel due to the strengthening of the dollar, as well as the growth of oil production in Libya to nearly 600 thousand barrels per day. Fears about the crisis in Iraq weakened, as the Iraqi Army stopped the advance of militants and about 75% of oil production capacities remain under the government control. We expect the price to stabilize in the near future in case of absence of new events in the troubled countries like Iraq, Libya and Ukraine. Downward influence can also have an increase in the volume of exports from Iran in case of a compromise on the nuclear program of the Islamic Republic. We maintain medium-term negative outlook, but admit the possibility of a sharp rise in case of growth of geopolitical tensions.

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