Commodities Update 45
Oil price below USD 50; gold price soared
Oil prices increase below 1 percent- The expected deflection because of the latest US job market data was absent. In contradiction to the low job market data the weak US-Dollar is cater for higher oil prices. Commerzbank’s analysts add for consideration that the development of the oil price depends also on US demand. Moderate economy data in the USA could have influence on oil’s oversupply. But ongoing conflicts in Canada, Venezuela and Nigeria stop the current oil production. Drillings in the US slightly increase because of the obvious oil price rise in the past weeks.
In May the gold price decreased because of interest rate hikes from USD 1,300 to USD 1,200. But because of the low job market data gold climbed around USD 30. The expectations of a presumptive interest rate hike for this year dropped to 60 percent and support the current gold price. According to Commerzbank gold inflows are clearly noted after the latest US job market data. All in all the gold inflows aggregated to 99 tons since May.
Copper’s performance was volatile after its high of USD 5,000 in March. Especially an unforeseeable demand from China has big influence on copper’s price level. Also copper profited from the latest US job market data and the weak US-Dollar. China is known for increasing purchases when economy data are lowered. Therefore purchases were clearly higher in January 2016 than previous year. Achim Wittmann, LBBW analyst, predicts that the copper price will not increase in the next time. His explanation is based on decreasing energy prices and a more stable US-Dollar.