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.