13.11.201815:55 Forex Analysis & Reviews: The focus of the week: how will gold and oil behave?

During the start of the trading week, oil prices rose against the background of the fact that Saudi Arabia, the leader of world exports of crude oil, announced its plans to reduce production by 500 thousand barrels per day to stop the sale, which led to a decrease in quotations by 20% for five weeks. However, the cost of a barrel may continue to fall, as traders expect a greater restriction of production by OPEC countries.

Gold is another commodity that can be traded in a declining market during this week, as traders take into account the prospects for a further increase in interest rates by the US Federal Reserve.

After a sharp rise in the producer price index of America, further growth in consumer inflation and retail sales may strengthen the US dollar, creating additional difficulties for most products whose value is expressed in dollars. In addition to the macroeconomic statistics for the United States, investors will monitor the rate of inflation and Euroblock GDP, the output of which is scheduled for this week.

Although a depressed interest in risk continues to be noted in the energy sector and in the metals market, long-term commodity investors may find refuge in agricultural commodity markets. The formation of signals for the purchase of soybeans, soy products, wheat, cotton, orange juice, and lumber began.

If we talk about oil, the price of Brent rose by more than 1% at the beginning of trading in the Asia-Pacific region. WTI quotes also climbed. Last Friday, November 9, Brent slipped below the support level of $ 70, which is held from May, while WTI fell below the level of March, $ 60.

Last weekend, Khalid al-Falih, Saudi Arabia's energy minister, announced that in December, oil supplies from the Kingdom would squeeze about 0.5 million barrels per day.

Despite the fact that the statement by the Saudis immediately gave the oil market an impetus, it could still disappoint investors who expect OPEC to reduce supplies to 1 million barrels a day to compensate for the excess supply that resulted from the sanctioned exemptions.

This weekend, Khalid al-Falih sank the meeting of the OPEC Joint Monitoring Committee in Abu Dhabi, during which there was not a hint that the participants of the oil cartel, except for Saudi Arabia, are seeking to limit the supply. At the same time, a decrease in exports by Saudis can be temporary, since the minister called December the traditional period of reducing demand.

It is possible that OPEC missed the opportunity to make a decision and take action, so a decline in production is likely to be on the agenda of the next, more important, policy meeting, which will take place on December 6 in the Austrian capital.

The latest round of OPEC production restrictions began in January last year as a response to the price cut as a result of the shale oil boom in America, which caused a decrease in oil prices to $ 25 per barrel. Despite the fact that the agreement should be valid until the end of this year, the group prematurely ceased supply restrictions, as prices began to rise sharply from the end of 2017. However, the United States is again putting pressure on OPEC's position, as it produces a record of 11.6 million barrels per day.

$ 1,200 gold support can be broken

Support at $ 1,200, which has been a support for gold in the past two months, maybe broken through this week, as data on the state of inflation in America has every chance to confirm the Fed's intention to raise interest rates next month.

During the year, the regulator raised rates three times and plans to beat the curve next year, as the American economy has recently been showing strong growth.

The increase in rates, as a rule, strengthens the position of the dollar, which is traded in an inverse relationship with gold.

The dollar index, which reflects the strength of the dollar against a basket of six world currencies. The main US trading partners, rose by 0.22% last Friday, closing for the fourth week in a green zone. TD Securities predicts that during this week, gold will lose its appeal as a "refuge", and investors who are convinced of the strength of the US economy will transfer funds into dollars.

On November 9, December gold futures sank 1.3% to $ 1,208.60 per troy ounce, which was the sharpest daily sale since August 15. The session minimum was at the level of 1207.30.