26.05.2016 - Gold may fall to 1,200 dollars per troy ounce in the near future
The price of gold continues to fall against the background of the increased probability of the Fed raising interest rates in June, which traditionally has a negative impact on gold, because makes interest income assets more attractive than the gold. On the other hand, the Fed's move will lead to the strengthening of the US dollar, which will also put pressure on the gold. It is worth noting that in case of the stock markets will fall, investors' interest in gold as a safe asset will increase. Our medium-term outlook remains negative with a potential target near 1100 dollars per troy ounce, but in the near future we can see the price correction.
The price of futures for Light Sweet crude oil continued to grow and reached the psychologically important level of 50 dollars per barrel. The reason for the continuation of the growth was statistics on the US oil inventories, which fell by 4.2 million barrels compared to the expected reduction of 1.7 million barrels. This fact is explained by the interruption of oil supplies from Canada in connection with the forest fires in the state of Alberta. At the same time, gasoline inventories unexpectedly rose by more than 2.0 million barrels. It is worth noting that soon the season starts road trips in the US, which will increase the volume of oil consumption. Investors are waiting for the OPEC meeting on June 2, and thereafter, we expect a strong price movement. A more likely scenario, according to our forecasts will be a correction in oil prices.