22.03.2016 - Explosions in Brussels has led to an increase in the price of gold

The price of gold rose strongly today amid reports of an explosion at the airport and the metro in Brussels. Such events traditionally are leading to a short-term increase in the price of gold due to the increased interest in defensive assets. A slight increase in the US dollar constrains increase in gold prices. The potential for further increase is limited. On Friday will be published final data on US GDP growth for the 4th quarter of 2015. It is worth noting that forecasts of acceleration of US economic growth in the first quarter increases the likelihood of the Fed raising interest rates in June, will be negatively displayed on the gold price. In this context, our medium-term outlook remains negative.

The price of Light Sweet crude oil continues to consolidate below 42 dollars per barrel after in the US has ceased the fall of the number of active drilling rigs. It is worth noting that a number of representatives of about 15 countries will meet in Doha in order to achieve a consensus on freezing the volume of oil production at the level of January. Meeting will be held on April 17, but Iran, which plans to increase oil production to 4 million barrels a day previously refused to join this agreement. From a fundamental point of view, an excess of oil on the market is maintained and in case of rise in oil prices, the US companies will increase production volumes. We maintain our medium-term negative outlook on oil and look forward to the resumption of the negative dynamics in the near future.

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