22.10.2014 - Demand for defensive assets continues to grow

The price of gold continued to rise on expectations of the publication of data on the consumer price index in the United States, the reduction of which can lead to later rise in rates of the Fed, which traditionally has a positive effect on the price of gold. In addition, the slowdown in China's growth in the third quarter to its lowest level in 5 years 7.3%, also had a negative impact on investor sentiment and increased demand for defensive assets. Today, trade dynamics will depend on the data on the consumer price index in the United States (12:30 GMT). Gold prices are also supported by the lack of progress in resolving the conflict in Ukraine. Given the expectation of further decline in equity markets, we maintain a positive medium-term outlook for gold.

The price of Light Sweet crude oil continues to consolidate near the level of 82.50 dollars per barrel. Stabilization of the price near this mark is associated with the expectation of data on oil and petroleum products in the United States (14:30 GMT). Growth of this indicator may lead to a further drop in the price. Downward movement is limited by the price approach to the cost of production of oil in Russia and Iran near $ 76 per barrel. We maintain a medium-term negative outlook for oil, but given the decline in potential of decrease, recommend to partially fix position near the level of 80.00 dollars per barrel of oil.

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