23.03.2015 - Demand for gold in China remains high

The price of gold continued to rise on the weakening of the US dollar and statements regarding the deteriorating outlook for growth in US economic indicators, which has led to a decrease in the probability of the Fed raising interest rates in June. The Chinese market is experiencing a strong demand for gold, which is caused by attractive levels to buy. We recall that China is the largest consumer of gold. Further movement of the price of gold will depend on the rhetoric of the Fed on monetary policy and solving problems related to the debt crisis in Greece. We maintain our medium-term positive outlook for gold and recommend to wait for a buy signal.

The price of Light Sweet crude oil showed a slight increase amid the weakening of the US dollar, but speculation regarding the reduction of spare capacity for the storage of oil in the United States and China continued to put pressure on oil prices. Positive for black gold quotes may be the termination of the strike at some US refineries. Talks on Iran's nuclear program may not lead to the lifting of sanctions that will support the price of oil. Given the oversupply of oil on the market, we maintain a medium-term negative outlook and recommend holding short positions with the target level of 40 per barrel.

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