20.09.2016 - Oil continues to decline
The gold price shows slight increase amid the weakening of the US dollar before the Fed statement on monetary policy. The probability of raising interest rates tomorrow, is minimal, but the Fed may hint at monetary tightening before the end of the year, which will reduce the attractiveness of gold compared to assets that provide interest income. It is worth noting that the demand for gold is rising against the background of investors' fears about the prospects for the growth of stock indices, as well as due to the increased consumption of jewelry during the holiday period in India and China in the coming months. The dynamics of trading today could affect data on the housing market in the US. Investors are waiting for tomorrow's publication of the Fed's statement on monetary policy. Our medium-term outlook remains positive, and tomorrow we will very likely see strong price movement.
The price of Light Sweet crude oil continued to decline after the Venezuelan oil minister said about the need to reduce oil production by about 9 million barrels a day to meet the level of consumption. It is worth noting that investors are used to the statements made by officials of some countries, among which is Venezuela, that do not correspond to reality and the impact of these words is limited. Investors are waiting for tomorrow's publication of report on oil inventories in the US, the Fed's statement on monetary policy and the outcome of negotiations of a number of major manufacturers of an energy conference in Algiers, which will be held September 26-28. Our medium-term outlook remains negative with the potential of decline to 35-36 dollars per barrel.