22.02.2016 - The price of gold will continue consolidation

The price of gold continues to look for an equilibrium point after showed strong growth at the beginning of this year, which was caused by a sharp increase in investor interest in protecting assets against the background of falling stock markets and oil prices. As a result, reserves of funds that invests in gold and tracked by Bloomberg rose by 154 tons since the beginning of the year against a reduction of 138 tons in the previous year. According to our estimates, quotes will continue to consolidate in the near future and a strong influence on this week will have the publication of the preliminary data on the US GDP growth in the 4th quarter of last year. Instability on the markets will keep interest in gold, but we expect a drop in its prices in the medium term due to the expected rise of the US dollar and the Fed raising interest rates.

Futures on the price for Light Sweet crude oil show modest growth in the beginning of the week, after the fall on Friday. After talks in Tehran it became clear that Iran does not intend to freeze the amount of oil production on January’s levels and the country will continue to increase the volume of exports after in January the sanctions on oil exports have been removed. This fact leads to a continuation of the negative dynamics of prices due to rising imbalances of supply and demand on the market. Oil reserves in the US continue to grow and warm weather in Europe have a negative effect on demand. Our medium-term outlook remains negative and we expect the price to drop in the near future.

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