Commodities Update 7

Commodities Update 7

04 August 2015

Important legal information


The Koreans are worried that a meltdown in Chinas’ stock market could destabilize South Korean equities. To prevent this they are, according to analysts on course to buy a record amount of gold in 2015. Although physical demand has also picked up in China and India, the strengthening dollar has kept prices down, because the currency has an inverse relation with gold. It has been trading between $1,073.53/ounce and $1,100/ounce and is therefore still on a five-year-low.

The oil price has dropped below $50 a barrel, which raises suspicions of a new era of lowerprices. According to an article in the Wall Street Journal, the U.S. are pumping record amount of oil and China´s growth is expected to be at a low level. Additionally sanctions on Iran are likely to be lifted. This will lead to a deepening oversupply and therefore keep the downward pressure on prices in the coming months. But even though analysts say that a return to prices of $100 a barrel is unlikely, they also don’t expect a return to super-low prices either, which would result in a `mid-price´ era. The prices are expected an average $60 to $70 a barrel in 2016 as U.S: shale oil drillers need these prices to be profitable.

 

 

04/10/2022 06:32:37