High oil stocks while gold trading price remains subdued

Published: 26 April, 2015 14:56

Oil pumps in Saudia Arabia
This week, the crude oil price tag has fluctuated a few cents around the $57 per barrel level, while gold futures have been trading at a disappointingly low level for some – in the region of $1,175 to $1,177 per ounce.

Small fluctuations around $57 per barrel

Crude oil stocks are currently at an eighty-year high, this being attributed to Saudi Arabia curbing its military campaign against Yemen.

While there no longer seems to be the threat of oil price crashes, prices have dropped from around $58 to $57, which is a minor fluctuation when considered in the context of thirty-day movements, between $40 and $58.

The good news is that the prospect of lower oil prices tends to be positive for the economy, bringing about a boosting effect. However, this may be moderate at first, as consumers have become more cautious over recent years.

Future promise for gold?

Reports from the London and Hong Kong online commodity markets are of weaker trading at prices of $1,185 – $1,210 per ounce during the past month. Six-month prices vary between $1,140 and $1,300 – so these latest gold fluctuations remain within lower end of that range.

More optimistically, if interest rates look set to rise in the medium to long term and the housing market recovers, speculative money starts to look elsewhere. Additionally, India and China along with other central banks still place great store in holding stocks of gold. It is for these reasons even though gold has been something of an underdog recently, many experts consider that we are at the lower end of the market price range and that gold bullion prices should rise over the next two years.

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