Gold and oil are becoming more expensive again

After three days of price drops gold He seems to catch the rising tide again. The ounce of gold returns to over 1,9 thousand. USD. They bounce too WTI crude oil prices, on this market, after two days of cuts, the barrel increased to almost USD 100.

The rise in commodity prices seems to coincide with a slight weakening of the US currency and a decline in US Treasury yields. Today the dollar is retreating from its two-year high in the previous session, while the 10-year bond yield may have dropped from a three-year high to around 2,8%.

Gold can be seen as a safe means of allocating capital in times of economic and political turmoil. And this is the situation we can face right now, when the Russian army is still attacking Ukraine and the aggressors see Ukraine's allies at the risk of a nuclear war, China is still struggling with the coronavirus epidemic, and the whole world is faced with uncertainty about the prospects for economic growth.

Oil between supply and demand constraints

After two days of decline, the price of a barrel of WTI crude oil rises today to ca. USD 99,5. It seems, however, that the situation in this market remains tense. There is still a risk that the European Union could join the US and the UK by banning Russian oil as part of sanctions for Russia's attack on Ukraine.

European buyers have already refused to buy millions of barrels Urals crude oil from Rosneft PJSC, and Asian refineries have abandoned Russian oil due to sanctions imposed on the company that supplied the raw material.

On the one hand, global oil demand may decline due to lower economic growth prospects and lower demand from China, where some industry is paralyzed by pandemic restrictions. On the other hand, in Europe, the sanctions imposed on Russia may lead to a reduction in the supply of the raw material, which would translate into pressure to increase production in other regions of the world. Opposing factors may keep the WTI oil price in a range of USD 92-114.