What Can We Expect for the US Dollar, Gold and Oil in the Year 2015?

Posted by Deb | Guest Post,Investments | Monday 15 June 2015 8:28 pm

This last year, 2014, will undoubtedly take its place in the history. During 2014, risks had been growing around Ukraine and the Middle East. One of the main events of the year was the collapse of oil prices. In June, 2014 barrel costed about 115$, but in the last days of the year quotes slumped to  56$.

What Can we expect for the year 2015?

Oil market

The main reasons for the oil prices collapse in 2014 were:

  • Increase of hydrocarbons production in the USA from 9.8 to 11.5 mln barrels per day;
  • Recession in countries of the European Union led to decrease in consumption and prices of hydrocarbons;
  • Growth of supply in Iran planning to increase production twice and Libya’s return to the market;
  • Technological factor: improvement of technology of production and decrease of prime cost as the result.

Currently, one can witness a disproportion between demand and supply: Every  day,  the level of oil production exceeds the market  demand by 600-700 thousand of barrels.

Analytics of the US investment banks assume that sometime during the first two quarters of 2015 year this index can grow up to 1.25 mln barrels per day. This factor will put a strong pressure on oil quotations,  so that we may see  again the low values  of 2008, when the  cost of Brent was $36 per barrel.

US dollar

The main global currency was boosted by the growth of the US economy which was growing with the fastest pace of the last 11 years. The US department of commerce revised its GDP estimation and defined it up to 5% per annum. Such estimation was justified by a higher consumer demand  and expenses of business. It was the fastest pace since 2003. It had been reported earlier that US economy grew for 3.9%.

This intensive growth in 2014 lays a solid foundation for 2015 and we can expect that the US currency will be consolidated against its major competitors.

Gold

Finally,  let’s talk about gold. Since there is no inflation risk in the USA – on the contrary, deflation presses Europe - there is no ground for traders to invest in gold: savings are not depreciated. This can make the precious metals less popular and quotes of gold may get to $1100 per ounce.

Confident growth of the US economy will support global markets through 2015, whereas low oil prices will have a positive effect for the economic growth in general.

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