Crude oil
During the deals on Friday, crude oil prices fell for the third sequential day amid an optimism decline concerning the global economy recovery. According to the trading results of the New York Commodity Exchange, March sweet crude oil futures ticked down by 1,54 USD or by 2% to 74.54 USD per barrel, it has been the lowest level since December 22.
During last three sessions, the decline accelerated, as China took steps to curb lending volumes in order to prevent the economy overheating. Thus, the world biggest source of oil demand growth turned out to be under the threat.
It seems less likely that the US economy, which is the largest oil consumer in the world, will make a great contribution to the world demand in short-term outlook. Shares, which are never used by the oil market as an indicator of economy health, sharply decreased on Friday, as positive financial companies’ reports fell short of expectations. In addition, on Thursday Obama proposed to clamp down on speculation by commercial banks. Many oil market largest participants are commercial banks, including Goldman Sachs Group Inc. and JPMorgan Chase & Co. They can be reluctant to change their trade policies.
Gold
On Friday during the day gold futures got back a part of the lost positions due to purchases at low levels and some demand for this metal as a saved-haven asset on the back of the uncertainty; however, the general tone for the trading was negative, as investors did not buy risky assets.
February gold futures quotations dropped by 13.50 USD or by 1.2% to 1089.70 USD per ounce. Gold futures reached the lowest level of 1081.90 USD.
Currently, at the prices tumble below 1100 USD level, the increasing tendency of gold purchases by the Indian market participants, buying this precious metal for jewel and investors at the market was observed. Although, low appetite for risk at present moment exerts pressure on prices, longer-term investors consider this metal the saved-haven asset amid the economic uncertainty. If previously gold was considered the saved-haven asset, during recent months this metal had been traded as risky asset, along with other commodities, stocks and high-yield currencies. During last week, the markets showed less appetite for risk amid the threat of the interest rates rise in China and fears about financial situation in Eurozone. In addition, the president of the USA Barack Obama came forward with an initiative, which in case of its realization will not allow the American banks to mix commercial operations with trading of financial instruments on own funds. Some market participants are afraid of that the precluding the trading on own funds can curb the inflow of investments to the gold and other metals market.
Best regards,
analyst: V. Donin
