Commodities Update 12

Commodities Update 12

16 September 2015

Important legal information


According to Reuters, with Asian demand slowing, not only due to China’s weakness, but also from rising political risks in countries such as China, Malaysia and Thailand, the outlook for the oil market remains hazy. Even though there is already an oversupply regarding oil, Saudi Arabia increased its oil exports. Both factors contribute to keeping oil prices on a low level.

The uncertainty over the timing of an increase in interest rates has weighed on gold all year. Last week the precious metal fell to its lowest level, measured in Euros, since eight months. The expectations that the Fed would decide on increasing interest rates in its September meeting eased due to concerns over slowing economic growth in China and volatility in financial markets, says Reuters.


After reaching its low at the beginning of September, cotton prices slightly increased during the last trading days. Like gold, the development of cotton prices are highly dependent on the Fed’s decision on Thursday. If they increased interest rates, the U.S-Dollar would appreciate, consequently cotton would get more expensive for foreign customers. Even though expectations for this year’s cotton harvest were reduced by nearly 20% compared to last year, the prices have decreased. This might be a reaction to China’s economic downturn.

 

 

03/10/2022 08:21:01