Commodities Update 6

Commodities Update 6

den 22 juli 2015

Important legal information

Gold close to 5-Years Low / Oil price rebounds over 50 USD after significant losses

Gold prices fell to five-year lows as the likelihood of a rate hike in the US increases. The increase in interest rates could make the dollar rise and therefore raw materials less affordable to overseas investors. Moreover higher interest rates tend to draw money into yield-bearing assets, like government bonds and away from commodities. Gold as a safe haven investment became popular after the 2008 financial crisis and the widespread central bank strategy of zero interest rates.

Furthermore, China has become the fifths biggest holder of gold reserves, by buying 604 tons of gold since 2009. However, market analysts expected a much bigger size. Therefore, shares of mining companies, such as Barrick Gold and Newmont Mining experienced significant losses as a result of the news this week.

After WTI has fallen under the April low of 50 USD on Monday, oil has rebounded due to the strong dollar on Tuesday. Nevertheless the oil production of the OPEC countries is still on a record high. Moreover, if economic sanctions are lifted against Iran due to the nuclear agreement, Iran could regain oil sales. Tehran plans, according to its oil minister to restore output to the level before the sanctions came into force. Such an increase in output may cause oil prices to fall.

 

 

2022-12-04 06:09:16