24.02.2015 - Growth of oil will lead to further drop in prices

The price of gold could not continue to decline and move below the psychologically important level of $ 1,200 per troy ounce. The reason for the increase in the price of gold was the news on the worsening situation in the housing market in the US, where the number of home sales in the secondary market fell to 4.82 million against expected reduction to 5.03 million. In addition, the demand for defensive assets increased due to the fall on the US stock markets. Analysts expect Janet Yellen’s speech in the Senate, during which the head of the Fed may indicate the timing of the Fed raising interest rates, which have a negative impact on the dynamics of the gold price. Investors continue to monitor the Greek crisis. Our medium-term outlook remains positive and we look forward to the resumption of purchases near the levels of 1180-1200 dollars per troy ounce.

The price of Light Sweet crude oil continued to fall and broke through the psychologically important support level of 50.00 dollars per barrel. The reason for the fall was the data on the growth in US oil inventories to historic highs. In addition, the demand for oil is reduced by strikes at some refineries in the US. Reducing the number of drilling rigs in the United States slowed down. The excess oil on the market continues to put pressure on oil prices, and we expect a further decline in the near future. The dynamics of prices in the near future will depend on the data on the industry in China and the maximum oil reserves in the US, which will be published on Wednesday. We maintain our medium-term negative outlook.

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