26.05.2014 - Price volatility will decrease today

The price of gold continues to consolidate near the level of $ 1,300 per troy ounce. We expect a strong movement in the coming days due to the reduction in the amplitude of price fluctuations. Demand for defensive assets is promoted by the tense situation in Ukraine, which may stabilize after the inauguration of the new president, who was elected in the first round yesterday and completion of the antiterrorist operation in the eastern regions of the country. In addition, investors are counting on new measures of the ECB to deal with low inflation. On the other hand the growth of prices is constrained by weak demand on Asian markets and among investors. We keep medium and long term positive outlook for gold.

The price of Light sweet crude oil continues to be at a high level after the release of data on oil inventories in the United States that dropped 7.2 million barrels to its lowest level in six months. In addition, the increase in prices is promoted by decline of oil supplies from Libya. Investors hope for resolving the situation in the east of Ukraine in the next month and reduction of tensions between Russia and the West. We maintain a long-term negative outlook for oil and expect price drop after the stabilization of the situation in Ukraine.

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