20.07.2016 - The price of gold continues the consolidation

The price of gold continued to consolidate around the level of 1330 dollars per troy ounce. The growth of the dollar and positive statistics on the housing market in the United States, limited the growth of the precious metal. It is worth mentioning that the number of housing starts in June rose to 1.19 million compared to 1.14 million in May. The recent publication of a number of positive statistics in the US and reduced concerns about the consequences of the UK’s exit from the EU has led to an increase in the probability of the Fed raising interest rates this year, which is negatively displayed on the attractiveness of gold compared with assets that generate interest income. According to our estimates, the decline may continue in the near future, but demand for gold may rise again in case of a fall on the stock markets.

The price of Light Sweet crude oil continues to decline after several unsuccessful attempts to resume growth. On the market once again are discussing a global oversupply of oil on the market. Interruptions in the oil supply from Libya have limited impact on the dynamics of prices. Investors are waiting for the publication of statistics on the US oil and petroleum products (14:30 GMT). The decline in US oil production may slow down due to increased drilling activity in recent weeks. In addition, OPEC countries continue to increase the volume of production. We expect increased volatility in the near future and do not exclude a sharp drop from the potential targets at 43 and 40 dollars per barrel. Our medium-term outlook remains negative.

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