17.10.2016 - We expect strong movements on commodity markets this week
The price of gold showed a slight decrease, but continues to consolidate close to the levels of 1250-1260 dollars per troy ounce in anticipation of a large number of important statistics, among which will be the data on the index of consumer prices in the US, which will be released tomorrow, as well as data on the growth of China's GDP on Wednesday. It should be noted that the reason for the sharp decline in quotations in recent weeks has been the growth of the probability of the Fed tightening monetary policy, which will reduce the attractiveness of investments in gold, compared with assets that generate interest income. It is worth noting that in case of accelerating the growth of inflation in the United States, will increase the likelihood that the Federal Reserve will increase interest rates in December. We expect strong price movements this week, but despite the possible decrease in quotations in the near future, we maintain a medium-term negative outlook on expectations of falling stock markets.
The price of Light Sweet crude oil fell against the publication of data on the number of active oil rigs in the United States by a service company Baker Hughes, which increased by 4 to 432. In addition, the pressure comes from the news on the growth of the volume of OPEC production to its highest level in 8 years 33.39 million barrels per day. It is worth noting that high oil prices stimulate growth of shale oil production in the US. In addition, we are skeptical about the possibility of the implementation of the agreement of 14 countries of the OPEC concerning the intention to reduce the volume of production in the cartel up to 32,50-33,00 million barrels a day, especially against the background of further increasing the volume in Iran, Libya and Nigeria. Our medium-term outlook remains negative and we expect a strong movement after the current consolidation above the level of 50 dollars per barrel.