24.05.2016 - The probability of falling crude oil prices significantly increased
The price of gold continued to fall and returned to the important resistance at 1244 dollars per troy ounce. The reason for the change in investor sentiment against gold was the publication of the previous Fed meeting minutes, as well as the statements of a number of Fed officials who have indicated a possible increase in interest rates in the case of improvement of macroeconomic indicators in the US. Tighter monetary policy has traditionally had a negative impact on the dynamics of gold. Growth of volatility is forecasted on Friday after the publication of the preliminary report on US GDP growth in Q1. Our medium-term outlook remains negative, but if the stock markets will fall, the demand for defensive assets such as gold will rise.
The price of Light Sweet crude oil decreases on background statement by the Minister of Oil of Iran with respect to the country's intention to continue increasing oil production and exports may reach 2.2 million bpd in June. This statement reduces the possibility of reaching a consensus at a meeting of OPEC on 2 June. At the same time, the supply from Canada and Nigeria continues to recover after the recent decline. The current price level is acceptable for a number of shale oil producers, which also increases the pressure on the oil quotations. Given the persistent excess of oil supply, we are forecasting a drop of oil by 15-20% in the coming weeks.