Major Events:
Oil price rally – Crude oil ripped higher at the start of the week, boosted by supply disruptions in Nigeria and political turmoil in Venezuela. Insurgent attacks on major oil pipelines in Nigeria is currently weighing on the country’s production, dragging output down to their lowest levels in decades. Meanwhile, conflict in Venezuela has led to several power outages, dampening production as well.
This prompted Goldman Sachs to predict that the oil market likely shifted to a deficit this month, backpedaling on their previous forecast that the commodity is likely to hit $20/barrel on oversupply. The investment bank estimated that crude oil could hit $50/barrel in the second half of this year, citing stronger demand from India, China and Russia.
Gold price drop – The precious metal didn’t move in tandem with crude oil prices, as reports of renowned gold bull John Paulson cutting his long position hit the airwaves. This marked his fund’s third reduction in bullish gold bets this year, indicating that he might be shifting his long-term bias or simply booking profits. Gold prices fell to $1,276.85/ounce from its May high of $1,303.80/ounce.
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