23.05.2016 - Gold falls on the background of dollar growth
The price of gold continues to show decline despite the recent rebound from the strong support around 1244 dollars per troy ounce. It should be noted that the negative metal has become the data on existing home sales in the United States to 5.45 million in April, against 5.36 million in March, that has strengthened the dollar. In addition, the president of the Federal Reserve Bank of New York William Dudley said earlier that the markets underestimate the likelihood of the Fed raising interest rates in June. Inflation in the US and steady improvement in the labor market situation in the United States, are the main factors that stimulate the US regulator to raise interest rates, which is negative for gold, which does not bring interest income. We maintain our medium-term negative outlook for gold, despite the possible increase in the near future in connection with a possible fall on the stock markets.
The price of Light Sweet crude oil is corrected downwards due to the strengthening of the US dollar and the temporary nature of the factors that have caused the recent price increase. Among them we should note the forest fires in Canada, the economic and political crisis in Venezuela and attacks on oil facilities in Nigeria. Supplies from Libya have also declined due to the military confrontation in the country. It is worth noting that the recent price increase has become acceptable to a number of companies in the United States and the volume of production may slow the fall, together with an increase in supplies from Saudi Arabia, Iran and Russia will keep the excess supply of oil on the market. The potential growth of quotations of oil is limited and we expect falling prices in the near future by 15-20%.