27.03.2014 - Gold has reached $ 1,300 per ounce

Major U.S. stock indexes finished the trading session lower, amid controversial data on durable orders, which grew in February by 2.2% that is twice higher than the forecast. In this case, the same indicator with the exception of the transport component grew only by 0.2% vs. expected 0.3%. The U.S. service PMI reached the level 55.5 compared with an expected 54.2.

In addition, the president of the Federal Reserve Bank of St. Louis, James Bullard, in his speech at the conference in Hong Kong said that the unemployment rate until the end of 2014 will drop to 6.0%, but rates of the Fed will remain at current levels for a considerable time after the end of assets buying program. Considering the lack of new stimulus for growth and overbought U.S. market, we maintain a long-term negative outlook on the U.S. indexes.

On this background, and also because of growing fears of deflation in the euro area, the quotes of euro fell and now are moving below 1.3800. The course of trading today will be affected by data on U.S. GDP growth in the 4th quarter, the number of unemployment claims in the U.S. (12:30 GMT) and pending home sales in the U.S. (14:00 GMT). We should also pay attention to M3 money supply in the Eurozone (09:00 GMT). We maintain a long-term negative outlook for the euro. We will need new sign.

The price of the British pound continued the upward movement on the background of statements by the representative of the Bank of England - Martin Will concerning growth of wages, sustainable improvement in the economy and reduction of inflation below the target level. The course of trading today will be affected by the data on retail sales (09:30 GMT). We maintain a long-term positive outlook for the pound. In the short term, growth may slow down in the area of 1.66. Increase in volatility is expected on Friday after the release of data on the balance of payments and growth of British GDP.

The Japanese yen strengthened slightly against the weakening dollar and increased demand for yen due to the completion of the financial year. Increase in volatility is expected tonight (23:30 GMT) after the release of data on household expenditures, unemployment, consumer price index and retail sales in Japan. In case of positive data the Japanese yen is likely to continue to strengthen, but despite this we maintain a long-term positive outlook for the USD/JPY.

The price of the Australian dollar continues to rise amid positive data from the report of the RBA on financial stability as well as increasing index of leading economic indicators in China. After reaching the level of 0.93, we expect a price correction. We need new signals to determine the future direction of the price movement.

New Zealand Dollar continues to rise on the back of positive statistics on the trade balance, which rose for the fourth time in a row and reached 818 million against the forecast of 600 million. In addition, the New Zealand and Australian dollars strengthened amid speculation about possible measures of stimulating the economic growth in China. The growth of the New Zealand dollar in the medium term may continue.

Light Sweet crude oil showed a positive trend on the background of supply disruptions from Libya and Nigeria. Crude inventories in the U.S. increased by 6.6 million barrels against an expected growth of 2.9 million barrels. The prices were supported by data on the reduction in gasoline inventories by 2.8 million barrels. We maintain a long-term negative outlook on forecasts of a more rapid growth of oil production comparing with consumption.

The price of gold reached the psychological mark of $ 1300 per troy ounce. Demand for the yellow metal in China is reduced. Besides, stocks of investment funds investing in physical gold began to decline. Among the negative factors should be also noted the reduction of the quantitative easing program in the U.S. Growth in demand for the metal may be resumed in case of falling on the stock markets as well as rising tensions between Russia and the West. We maintain a long-term positive outlook for gold and expect an upward correction in the near future.

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