27.10.2014 - Gold prices continue to consolidate

Gold price corrected and keeps consolidating near the level of 1230 dollars per troy ounce. The reason for stopping the decline was both technical factors, as well as the weakening of the dollar against the background of statistics on new home sales in the US, which in September totaled 467 thousand. Consolidation in gold prices will likely continue up to publication of the statement of FOMC of the Fed on monetary policy. Today the course of trading may be influenced by the data on the service PMI in the United States (13:45 GMT). Gold demand from Asian consumers remains higher due to the holiday season. The fall on the stock markets increased interest in defensive assets such as gold. We maintain a positive medium-term outlook for gold.

The price of Light Sweet crude oil continues to decline gradually despite the weakening dollar. The reasons for the fall are the growth in US oil inventories, weak oil demand in Europe and Asia due to the sustained economic growth in the regions, and also the maximum amount of oil in the last 2 years in the OPEC countries - 31 million barrels per day. Falling oil prices may stop in case of a reduction in oil production in the OPEC countries, but Saudi Arabia and Kuwait have announced their intention to keep volume of oil production. At the moment, we see no reason to change the negative trend to positive and look forward to continuing the downward price movement in the medium term.

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