The price of gold continued to decline after the speech of the head and deputy head of the Federal Reserve that has led to an increase in the likelihood of interest rate increases this year. As a result, the market assesses the likelihood of tighter monetary policy in the US in September, with a probability of 33%. We recall that the gold is reduced by raising interest rates, because it does not bring interest income and becomes less attractive compared to assets that bring interest income. Despite the current decline in prices in the medium term will support the growth of demand for physical gold due to the holiday period in China and India, which begins in autumn, as well as in anticipation of the fall in stock markets, which will lead to increased interest in defensive assets.
The price of Light Sweet crude oil continues to consolidate against the backdrop of discussions on the future meeting of major oil producers including OPEC countries, Russia and the other at the end of September in Algeria. We are skeptical about the possibility of the influence of this meeting on the situation with excess of supply of oil in the world. In addition, the volume of production in Iraq has continued to grow, and in Iran said that will join the initiative to freeze oil production only with the condition of the possibility of restoring market share, which had before sanctions. Our medium-term outlook remains negative and we expect renewed decline in the near future.