24.08.2016 - We expect the resumption of the negative dynamics of oil
The price of gold showed a decline on a background of growth of US dollar, due to the publication of strong statistics on new home sales which totaled 654 thousand in July against the forecast of 575 thousand. It is worth noting that earlier statements by the Fed has led to increased speculation about a possible rise in Fed interest rates this year. Investors are waiting for Janet Yellen speaking on the economic symposium in Jackson Hole on Friday, and the rhetoric of the head of the American regulator can greatly affect the quotes of the precious metal. The growth in demand in the coming months is possible in case of a fall on the stock markets. Our medium-term outlook remains negative.
The price of Light Sweet crude oil showed a rebound after recent decline. It is worth noting that the market has revised forecasts on a possible consensus on the freezing of oil production among OPEC countries, Russia and others. In addition, Iraq announced plans to increase production volumes, and a truce in Nigeria will have a positive impact on the recovery of oil supplies from the country. According to our estimates, the excess of oil supply on the market will persist, and drilling activity in the US will continue to intensify in the coming months, which will lead to lower prices to the level of 40 dollars per barrel or below. Our medium-term outlook also remains negative.