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Wall Street is falling due to the decrease in oil prices. Gold is going up

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Wall Street is falling due to the decrease in oil prices. Gold is going up

Wall Street is falling due to the decrease in oil prices. Gold is going up
July 06
09:00 2016

On Wednesday oil prices continue to fall after a brief rise was recorded. Investors are also worried because of the excessive supply of hydrocarbons and the weakness of the world economy, which Britain’s decision to leave the European Union can strengthen.

According to MarketWatch, the dollar growth also puts pressure on the commodity markets, including the oil one.

The cost of the September futures for Brent oil has fallen by 1.4% – to $ 47.28 per barrel by the middle of the day at the London Stock Exchange.

By that time the price of August futures contract for WTI crude oil has fallen by 1.2% – to $ 46.05 per barrel on electronic trading at the New York Mercantile Exchange.

Market participants expect the information about oil stocks in the US, which will be published a day later than usual – on Thursday. This is due to the fact that on Monday the United States are celebrating a national holiday – Independence Day. As estimated by experts, probably, oil reserves fell by 2.5 million barrels last week.

On Wednesday night Norwegian oil workers stopped the salary negotiations, informed the trade union Industry Energy. “We discuss the further strategy, the parties are open to negotiations, but the probability of a strike remains”.

The fall in oil prices put pressure on the energy sector. It was reinforced by the stable uncertainty which the investors faced after the referendum in the United Kingdom. As a result, US stocks have fallen after the best week’s result for the year.

Bank stocks showed the dynamics that was worse than the market one. The JPMorgan securities fell by 2.8 percent. The S & P financial sector lost 1.5 per cent.

«Brexit harms business activity and it is bad for the banks”, – said Brian Battle from the Performance Trust Capital Partners in Chicago.

The Dow Jones closed the session with the fall of 0.61 percent to 17.840,62 points, S & P 500 index – by 0.68 percent to 2.088,55 points, Nasdaq Composite index – by 0.82 percent to 4.822,90 points.

The energy Sector S & P 500 fell by 1.9 percent. The materials Index also lost 1.9 percent.

It was told in the Ministry of Commerce that the total volume of factory orders in the US had fallen by 1.0 percent in May that year after a revised growth by 1.8 percent in April.

Tesla’s shares have fallen by 1.2 percent after the maker of electric cars didn’t fulfill the target level of the supply two quarters in a row.

Meanwhile, precious metals prices are rising. In London the price of gold has risen to a peak over two years due to the increased demand for safe assets.

The futures contract for precious metals for the immediate delivery has been growing for sixth consecutive trading sessions. On Wednesday it grew up in the price of $ 1375.28 per troy ounce during the trading. In New York futures for the delivery in August have risen in price by 1% – to $ 1371.9 per ounce to the end of the session.

Earlier the UBS Bank experts noted that gold could reach the figure of $ 1,400 per ounce in the near future. And the average cost will be equal to $ 1340 per ounce in the second half of the year.

“Most likely, we are witnessing the beginning of a new” bull “trend in the gold market,” – says Joni Tevez, the analyst of UBS.

Silver is increasing in price by 0.9%, to $ 20.115 an ounce. Since the beginning of this year, the precious metal has risen in price by 45%.

At the Comex exchange Platinum has jumped by 0.5%, to $ 1078 per ounce, while palladium has fallen by 0.6%, to $ 598 per ounce.

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