Commodity update 80
Oil price declines - Gold: safe haven
Oil price declines after strong weeks
During the first weeks of April, Oil prices increased steadily due to geopolitical tensions. However, this trend did not continue last week. US-Oil production rose to its highest level for over one year now. As a result, this destroys OPEC’s efforts to increase the Oil prices with production cuts. In the long-term, a recovery of the Oil prices depends significantly on the development of the global Oil discharge rate. The currently agreed discharge rate of the OPEC and further major producers expires at midyear. The future development remains to be seen.
Gold’s safe haven status
Geopolitical uncertainties further boosted the Gold price at the beginning of the week. With regard to the war in Syria and tensions between the USA and North Korea, the precious metal peaked at a fivemonth high of USD 1,292.80 on Easter Monday. In addition to that, also political risks could come into play. The upcoming election in France, for instance, will point the way of future Europe.
Industrial metals
Despite better than expected economy news from China, industrial metals like Copper and Zinc could not profit accordingly. Aluminum only, however, responded positively to the news from China. Among other factors, China does want to reduce its Aluminum smelting facilities. As a consequence, this could lead to production cutbacks and thus could potentially increase the Aluminum price.