The price of gold rose sharply against the weakening U.S. dollar and the Fed's statement on further tightening of monetary policy. The main drivers of growth were the Fed's promise of long-term stability of interest rates, as well as the escalation of the conflict in Iraq. The growth of geopolitical tensions also linked to the situation in Ukraine, where the anti-terrorist operation continues in the east of the country. These factors are likely to lead to continued growth in demand for defensive assets. At the same time, the demand for physical gold remains weak. We maintain a positive medium-term outlook for gold.
The price of oil continues to stay at high levels due to the clashes in Iraq and Libya. If Libyan factor is already accounted by the market, the prospects for increasing oil production in Iraq are deteriorating and there is a danger of oil supply disruptions from the country. Additional support for oil futures has positive forecasts for the U.S. economy, which should increase demand for oil. We expect that prices will continue to rise in the medium term and note that the reduction potential is limited.