17.08.2016 - Data on US crude oil inventories will lead to an increase in volatility

The price of gold has shown increased volatility on the background of the publication of important statistics on inflation in the United States. Thus, the index of consumer prices in the US remained unchanged in July, which coincided with forecasts of analysts. It is worth noting that inflation has a strong influence on investors' expectations regarding the timing of the Fed raising interest rates, which traditionally has a negative impact on the price of gold. At the moment, gold continues to decline after hawkish comments of the head of the Federal Reserve Bank of New York William Dudley according to which the Fed is approaching the time when it would be appropriate to raise interest rates. According to our estimates increasing interest in gold may strengthen in the near future in connection with a possible correction on the stock markets, which will increase the demand for defensive assets. Our medium-term outlook remains positive.

The price of Light Sweet crude oil has continued to rise on speculation about a possible agreement between major oil producers and OPEC on the Energy Summit that will be held in late September in Algeria. According to our estimates, the probability of reaching a consensus on freezing the level of oil production is low and the excess of supply will continue to put pressure on prices. It is worth noting that the season of trips to the United States comes to an end, and demand in China will decline against the background of a local oversupply and repair work on a number of refineries. Today will be published data on US oil inventories (14:30 GMT), which will increase volatility. Our medium-term outlook remains negative and we are waiting for the resumption of the negative dynamics in the near future.

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