Bi-weekly Commodity Insight: Brent & Gold
Holiday season and reduced inventories are boosting oil, but there is also less interest in the shiniest commodity, gold, after the recent price rally Join us once again as we take a closer look at the commodities market this week.
Route 66
Summer is fast approaching and more and more people are taking their cars to go on vacation, especially in the Americas. Since June, Brent crude futures prices have gone from USD 80 per barrel to trade upwards of USD 87 per barrel. Part of the explanation is found in the increased demand for refined oil during the summer months when demand increases with the holidays.
If we add the US inventories, we find that they are about 4% below the average for the period, which could result in an increasingly volatile price in the future before inventories are a little more filled. The US has recently used its stocks to keep prices down and reduce OPEC's ability to control the price, resulting in a relatively stabilized price this spring.
In addition to the increased demand for refined oil, unrest in the Middle East is also increasing, putting pressure on prices.
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Gold but no green forests
Few have missed the recent rise in gold and we now see it trading close to all time highs due to the uncertainty and the willingness of central banks to expand their reserves away from other currencies But after a period of continuous rise, the price has now stabilized. Demand for jewelry has slowed somewhat recently and with the high price of gold, many traders expect to see a continued slowdown in demand for jewelry. At the same time, it is worth bearing in mind gold's industrial use, which can be expected to increase with the easing seen around the economy and earlier inflationary pressures.
Gold is trading near a 5-year high of USD 2366/t oz on July 4. The price is in an upward trend, above MA 50 and 200. MA 50, 100 and 200 can still be seen in ongoing trend without any changes.
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