Forecast for the week: 14th - 18th of September:
This week, trend on the & ldquo; yellow metal & rdquo; will be determined by two key factors: dynamics of oil as well as the FOMC decision on monetary policy. We begin our review with the first factor. On Friday, September 11, the International Energy Agency (IEA) published its regular monthly review of the oil market. IEA forecast can be considered as positive for & ldquo; black gold & rdquo ;. Experts of the organization predict decline of global supply in 2016 by the Russian Federation, as well as American oil companies. Reduced demand from China and is not expected by IEA. Indeed, shale mining in the United States is going through difficult times because cost of a barrel is very high and current low oil prices contribute to reduction of activities. However, the fact that Russia will definitely reduce the volume of production & ndash; is very questionable. State budget of the Russian Federation was deficit in the first six months of this year. The average price of oil in this period was $ 59.4/barrel. In the second half of the year, the average price is already $$ 52.1/barrel. Thus, price per barrel has decreased by 12.2%, which will cause a new decrease in revenues of the state budget of Russia. Expenditures in Russia do not decrease, but have rather increased, and against this background, oil production will also be increased in order to & ldquo; cover & rdquo; hole in the state budget. In this regard, we expect growth in demand in & ldquo; black gold & rdquo ; again, which will put pressure on the price of oil and precious metals. With regard FOMC meeting, I think you can expect an increase of the rate on federal funds by 0.1-0.15%. There is no slowdown in inflation from beginning of the year in the United States, the unemployment rate reached its lowest level since March 2008. In my opinion, the US Federal Reserve will raise the interest rate by 0.25% to reach 0.5% until the end of the year, but this would be made by two steps - & ndash; in September and December. This process will be accompanied by planned strengthening of the US currency, which would put pressure on stock prices of the precious metal as the price of gold denominated in US currency. So, we open Sell position on growth of quotations to 1118/1131 and take profit around 1093.
XPT/USD and XPD/USD:
In the first half of the week the platinum group metals will benefit from a moderate demand. Investors continue to take profit on short positions against general growth of the commodity market. The past week, copper quotations rose by 5.94%, which is usually a positive sign for industrial products, because manufacture shows demand in this metal first. But in the second half of the week we expect dominance of bears. Firstly, the Fed may increase the interest rate, which will contribute to growth of the US currency in the Forex market and it has a negative impact on the platinum group metals, as the cost of raw materials is denominated in dollars. Secondly, production of cars in Germany in August fell by 37.7%, which is also a negative factor for both metals, because car industry provides main demand for the metal. Other states - leaders of the car industry - (USA, China and Japan) has not published their August release, but the first alarm has already been received. This week we expect flat on XPT/USD 960-1000 and XPD/USD 570 - 615.
In the first half of the week we can expect a moderate growth of quotations on the background of release of positive data on retail sales for August. Growth of income along with reduced unemployment can result in a positive report. This factor is confirmed by growth of car sales. Last week, a leader of growth in the US stock market was high-tech sector, which is usually a positive factor for the entire stock market, as it indicates interest of investors in & ldquo; risky assets & rdquo ;. Then, investors' attention will switch to the meeting of FOMC, the results of which will be announced on Thursday, 17th of September. Strong labor market release in August indicates that the monetary authorities may tighten monetary policy. The unemployment rate decreased by 0.2% at once, which was accompanied by growth of average earnings by 0.3% compared with the previous month. Another positive factor is & ndash; weakening of the US currency. USDX dollar index basket in the second quarter lost 3.1%, which will help to reduce trade deficit and will be a positive for the economy. Thus, the monetary regulator can raise the rate by 0.1% -0.15%, which, on the one hand, will not have a strong negative impact on the economy, on the other hand, it will indicate determination to change FOMC monetary policy. Changes in interest rates will have a negative impact on the US stock market and put quotations of the index S & amp; P500 down. This week we expect flat 1915 -1999.
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