FX.co ★ Oil and gold review

Oil

Futures trading on crude oil closed downside on Tuesday because British oil BP giant claimed that there was few evidence of any demand increase for energy sources. Hearings concerning futures trading limits started in Washington.
Futures contract Light Sweet Crude with the delivery fell by 1.15$ to 67, 23$ per barrel at the New York Commodity Exchange. Earlier during the session the contract went down to intra-daily minimum of 66, 60$ per barrel on the NYMEX.

After BP comments and forecasts release regarding the demand for energy sources, the descending tops became a major priority at the market. Besides, the latest economic data has stated that the world economy may stabilize this summer, but the recovery is likely to be sluggish. On the whole the demand for energy sources at the moment has been stabilizing after significant drop in the first part of the year. In addition, BP company claimed about decrease by 53% of profit in the second quarter.
BP comments gave rise to some concerns about a weak demand for energy sources.
The stock market “didn’t help” oil also, which put a downward pressure on the market.

Gold

Gold fell below 940$ per ounce on Tuesday for the first time for more than a week. It followed the decrease in merchandise market on the whole due to that the USA regulatory bodies opened a series of hearings concerning speculative futures trading limits. Besides, having a downward pressure on gold, oil prices dropped, and the dollar continued to strengthen, after that the economic data showed a decrease in consumer confidence in July. The dollar strengthening resulted in decline of gold metal purchasing volumes as the case of hedging from potential inflation pace and soft currencies.
At the COMEX the August’s contract fell by 14, 40$, or 1, 5% to 939, 10$ per ounce. SPDR Gold Trust reserves constituted to 1, 086.61 tons, according to the data on Monday, which reflected the lowering by 40 tons since the last month. Besides, the advancement in gold reserves of the given fund hasn’t been witnessed for 2 month already.

Kind regards,

Analyst: Vladimir Donin