18.06.2014 - Military conflicts in Iraq and Ukraine support high oil prices

The price of gold has resumed the growth after yesterday's downward rollback. Reason for the decline in gold prices was the success of the Iraqi army on struggle against the Islamists, which reduced demand for defensive assets. Growth of quotations on the metal resumed after the release of data on the increase of consumer inflation in the U.S. by 0.4% in May, which is 2 times more than analysts' forecasts. Today investors will be focused on the results of the meeting at the U.S. Federal Reserve (18:00 GMT). We expect a further rise in gold prices, despite low demand from investment funds and Asian consumers.

The price of oil has not changed much in the last day. Traders continue to watch the news from Iraq and are waiting for the publication of a report on oil and petroleum products inventories in the United States (14:30 GMT). An additional factor that may affect the price dynamics can be litigation between Russia and Ukraine on gas supplies to Ukraine. We recall that yesterday one of the largest pipelines in Ukraine exploded, increasing the tension on the energy market in Europe. We expect oil prices to remain high for a long time.

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