29.04.2016 - Gold rose on weak US GDP data

The price of gold has shown strong growth recently against the backdrop of a number of factors. Thus, the Fed left monetary policy settings unchanged and the likelihood of higher interest rates in June reduced, negative for gold. At the same time, the US dollar's decline was also due to the strengthening of the yen against the background of refusal of the Bank of Japan from additional stimulus. Yesterday, the demand for protective assets increased in connection with the publication of a report by the weak GDP growth in the US, which was only 0.5% in the 1st quarter compared to 1.4% in the 4th quarter of last year. Today, volatility will also be raised in connection with the publication of the report on personal income and consumer spending in the US (12:30 GMT) and the index of consumer confidence in the US (14:00 GMT). Current growth may continue up to 1300 dollars per troy ounce in the coming weeks is likely correction on the stock and commodity markets, which will increase the demand for gold.

The price of futures on Light Sweet crude oil continued upward trend amid the weakening of the US dollar. Traders ignored the weak data on US economic growth in the first quarter, due to the expectation of its acceleration in the second quarter. Support for oil was the decrease in the volume of oil production in the US by nearly 300 thousand barrels per day. Thus, the volume of production has fallen below 9 million barrels per day and will likely continue to decline. At the same time, Iran, Russia and other countries will continue to increase the volume of supply, which will lead to the preservation of oversupply on the market. The recent growth has been driven by the growth of speculations and the risk of a collapse on commodity markets in the coming weeks significantly increased. We expect price correction in May and then in the second half of the year there is a possibility of sustainable growth.

RISK WARNING: Trading of complex financial products, such as Stocks, Futures, Foreign Exchange ("Forex"), Contracts for Difference ("CFDs"), Indices, Options, or other financial derivatives, on "margin" carries a high level of risk, and may not be suitable for all investors. The possibility exists that you could sustain a loss of some or all of your initial investment and, therefore, you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading these markets, and seek advice from an independent financial advisor if you have any questions or doubts. Please carefully read our full "Risk Disclosure" and "Risk Disclosures for Financial Instruments & Investment Services". FXFINPRO Capital is the trading name of PFX Financial Professionals Limited, a limited liability company formed under the laws of Cyprus, registered with the Registrar of Companies in Nicosia, Cyprus, under nr. HE 237840 and regulated by the Cyprus Securities and Exchange Commission with license number 193/13.