20.08.2014 - Strengthening of the dollar has led to falling in commodity prices
The price of gold fell slightly amid easing geopolitical tensions due to the planned meeting of the presidents of Russia and Ukraine in Minsk on 26 August. Investors expect significant results from the talks between the two presidents, which should lead to a stabilization of the situation in the eastern Ukraine. In addition, the reduction of gold contributed to the strengthening of the dollar after the release of positive data on the number of housing starts in the United States which grew to 1.09 million in July, compared with an expected 0.97 million. Today gold price movement will depend on the minutes of the previous meeting of the Fed (18: 00 GMT). We maintain our positive medium-term outlook for gold.
The price of American Light Sweet crude oil continues to decline. One of the reasons for the fall of the price is the expiration of the contracts, before which traders close their positions. Strengthening of the dollar reduces the oil price. In addition, investors perceive negatively the increase in supply of oil in Europe, amid deteriorating macroeconomic indicators in the region. Reduction of geopolitical tensions also pulls down the price of oil. Today we should pay special attention to data on oil and petroleum products inventories in the United States (14:30 GMT). Growth of volatility is also expected on Friday after the speech by Fed chairman at the conference in Jackson Hole. We maintain a medium-term negative outlook for oil.