23.12.2014 - Saudi Arabia and Iraq plan to increase oil production

The price of gold fell yesterday after the release of data on the housing market in the US, where the number of sales on the secondary market fell to 4.93 million against the forecast of analysts 5.21 million. It is worth noting that the activity on the market has decreased significantly due to the holidays. Today is expected the publication of a large block of macroeconomic statistics. Particular attention should be paid to the data on US GDP growth in the 3rd quarter and durable goods orders. Gold demand in China and India is reduced. Interest in defensive assets can grow in case of a fall on the stock markets. In case of further growth of stock indexes gold can decrease to $ 1100 per troy ounce. Our medium-term outlook remains positive.

The price of Light Sweet crude oil showed a strong decline and compensated the previous growth within the correction. The reason for the decrease in quotations were the statements of the representatives of Iraq and Saudi Arabia, which announced their intention to invest in new fields and increase oil production. At a conference in Abu Dhabi also was noted a decline in investment in shale fields in North America. Taking into account the current position of OPEC and oil production growth in the United States, which leads to an imbalance of supply and demand is expected a decline, of oil prices in the medium term. We recommend holding short positions in oil.

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