31.07.2014 - Strengthening of the dollar has led to a drop in gold prices
The price of gold continued to decline against the strengthening of the US dollar due to positive data on GDP growth by 4.0%, with an expected growth of 3.1%. Also yesterday, the Fed said about another reduction of quantitative easing program to 25 bln. dollars of monthly purchases. At the same time the price of gold is supported by tense geopolitical situation in the world. Today, the course of trading may be affected by the data on unemployment in the Eurozone (09:00 GMT), and tomorrow at the same indicator will be published in the United States. We maintain our positive medium-term outlook for gold in the expectation of correction on the stock markets.
Price for the American Light Sweet crude oil continued to decline and almost reached the target level of 98.50. The reason for the fall was a strengthening of the US dollar on the background of the strong GDP growth, as well as by the data on reduction of oil reserves in the United States by 3.7 million barrels, compared with an expected decline of 2.2 million barrels, but at the same time, gasoline and distillers inventories increased by 400 thousand barrels and 800 thousand barrels, respectively. Further movement of oil prices will depend on tomorrow's data on industry of China, which is the second largest consumer of oil and the level of unemployment in the United States. We maintain a medium-term negative outlook for oil, but assume the possibility correction in the near future, and recommend monitoring the geopolitical news.