18.10.2016 - The inflation data in the US have a strong impact on the price of gold

The price of gold continues to consolidate in anticipation of the publication of important statistics on consumer price index in the US (12:30 GMT). In case of inflation growth, the likelihood of higher interest rates will rise in December, which is negative for gold that becomes less attractive for investment compared to assets that generate interest income. On the other hand, yesterday was published statistics according to which the volume of industrial production grew by only 0.1% in September in the US, which is 0.2% worse than the forecast. Tomorrow is also expected the increase of volatility in connection with the publication of reports on the growth of GDP and industrial production in China. We expect a strong movement after the current consolidation and maintain a medium-term positive outlook.

The price of Light Sweet crude oil continues the consolidation in anticipation of a new stimulus. The main factor that supported the quotations is the OPEC’s decision to reduce production to 32,50-33,00 million barrels per day compared to 33.39 million barrels per day in September. We are also skeptical about the possibility of a real implementation of the agreement. In addition, drilling activity in the US continues to grow and increase in oil prices will stimulate the US shale oil producers to increase production volumes. After the completion of the current consolidation we will probably see a strong movement and despite the possible continuation of the growth, we maintain a medium-term negative outlook.

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