Commodities Update 50

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At the beginning of the week oil prices are weaker due to the political instability in Turkey. Brent slipped by 1.2 percent to USD 47 per barrel. WTI decreased by around 1 percent to USD 46. The coup in Turkey had a supportive effect on oil prices on Friday because Turkey is a major transit country. Moreover, Turkey is an important oil consumer: In 2015 the oil’s demand in Turkey increased by 835,000 barrel per day, which is the daily consumption of the Netherlands.

Gold stabilized last week after a seven weeks rally period. The Brexit referendum buoyed the demand toward gold, which is considered by many investors as a “safe-haven”. According to Saxo’s Bank analyst, the gold price could slightly drop in the future. Gold market is strong bullish at the moment because of the uncertainty of the market. Gold demand remain stable at high level.

Nickel price soared because of China’s strong economic data. On Monday Nickel prices jumped by about 1,4 percent to USD 10,389 per tonnes. China’s economy grew by 6.7 percent in Q2 2016 compared to Q2 2015 boosted by lending and real estate market. Moreover, the industrial production rate increased in June by 6.2 percent. According to the INSG (International Nickel Study Group), the demand toward nickel exceed the supply in the first half of 2016. The production deficit accounted to 21,000 tonnes. All these factors could support the prices however the future development remains to be seen.