MCX GOLD & CRUDE OIL NEWS & REPORT - 15 JULY 2016

CRUDE OIL

 OPEC production has been ramping up along with Canadian and Nigerian after recent supply interruptions.

 Baker Hughes has reported the U.S. rig count is rising as domestic producers look to capitalize on stable prices near $50.

Brent could average $85 by 4Q17 and $80–$90 between 2018 and 2021. 

GOLD:

RBC Capital Markets, meanwhile, has upgraded its gold forecast for 2017 from $1,300/oz to $1,500/oz as fundamental demand for the safe-haven asset remained "steady". The bank advised investors to buy gold equities on any pullback in market valuations, which it would regard as temporary in the near-to-medium term.

RBC based its improved gold price forecast on five key drivers.

First, it said US real interest rates remained low and the next Federal Reserve Bank intervention wasn’t likely until mid-2017.

Second, RBC described central banking monetary policy globally as "accommodative", with an estimated 38% of developed market sovereign bonds – worth some $10.5 trillion – currently yielding negative returns.

Third, real interest rates of -0.42% continued to hurt yields. RBC calculated a negative real rate of -1% should mean gold moves to $1,546/oz.

Fourth, there was elevated geopolitical risk in the UK-Eurozone post-Brexit vote, with elections approaching in Germany and France fanning the flames; while Chinese, Greek and Italian banks were still a worry.

And finally, gold ETF inflows would provide a positive catalyst, while the status quo would simply support current levels.

  CAPITALSTARS