31.10.2014 - Gold hastened after the fall of US GDP data
The price of gold has accelerated the decline amid positive data on US GDP growth by 3.5% in the third quarter, against analysts' forecast of 3.1%. In addition the Fed reported a steady growth of the US economy, which reduces the demand for defensive assets. Despite the rapid decline of gold, we expect the time to buy due to the fact that the price of gold is approaching its average cost of production near $ 1,100 per troy ounce, and also due to the high demand from Asian investors, who on a background of falling prices may intensify. Low interest in gold due to the increase on the stock markets, but in case of change of trend, interest in gold will increase substantially. We predict a resumption of the price growth of gold in the medium term.
The price of oil compensated the growth of the previous day. The reason for the sales of steel news on US GDP, where despite a 3.5% growth in the 3rd quarter, consumer spending rose by 1.8% against the previous figure of 2.5%. Growth of exports of goods and services was 7.8% versus 11.1% in the second quarter. Rising of oil supplies is limited by the growth of OPEC to 31 million barrels, as well as weak demand for oil in Asia and Europe. We expect that oil prices will not grow up to the meeting of OPEC on November 27. We maintain a medium-term negative outlook for oil and recommend holding short positions.