Oil And Gold Analysis: January 19, 2014
ICM Brokers | Jan 19, 2015 02:16AM ET
CL
Oil prices rallied sharply on Friday, as bullish comments made by the International Energy Agency helped ease concerns over a glut in global supplies. For the week, New York-traded oil futures inched up 33 cents, or 0.67%, the first weekly gain in eight weeks. Concerns over weakening global demand combined with indications that the Organization of the Petroleum Exporting Countries will not cut output to support oil markets have weighed on prices in recent months. At the same time, increasing supplies of crude oil from North American shale formations have helped create a glut in world markets. The International Energy Agency cut its forecast for the increase in non-OPEC oil supply this year by 350,000 barrels a day, amid indications lower prices had begun to curb output in some areas, including North America.
GOLD
Gold rallied to the highest level in more than four months on Friday, as demand for safe haven assets was boosted amid turmoil in the currency market, following the Swiss National Bank's surprise policy decision to scrap its peg against the euro. Gold rallied sharply after the SNB shocked the markets on Thursday, saying it would discontinue the minimum exchange rate of 1.20 per euro it imposed in September 2011. The central bank also cut interest rates deeper into negative territory, a move intended to dissuade investors from buying the franc. Lower interest rates can give gold a lift, as it decreases the relative cost of holding on to the metal, which doesn't offer investors any similar guaranteed payout.
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