Crude Oil Forecast - July 2009 - Forex Forum

Our Monthly Predictions

Gold
Gold prices ended slightly higher on Friday; marking their first weekly gain in 4 days as a weaker U.S. dollar and record low Interest Rates boost the metal’s investment appeal. Analysts said that the precious metal has been trading modestly higher as the U.S dollar lost ground after the Fed announced it would keep Rates low. Gold prices inched above $945 an ounce in afternoon trading, and the metal is set to end the week up about 1% higher.

The price of Gold has largely moved in a broad range between $920 and $940 this week, as the combination of the resurgent Dollar and easing inflation worries put a damper on bullion’s rise. However, Gold is still vulnerable to short term profit-taking and may look to consolidate in the $910 to $950 area before pushing towards $1000 again.

For next week, Gold should see less liquidity and more short-term volatility because of thinner volume related to the U.S. Independence Day and Canada Day holidays. In addition, traders said that Gold’s upside may be tested as sentiment has improved, with the Dollar losing its upward momentum and commodities rising, while there are still some fears that inflation will continue.

Crude Oil
Crude Oil prices extended gains above $70 a barrel on Friday, after jumping 2.3% the previous day on renewed rebel attacks against oil facilities in Nigeria and worries that a glitch at the largest U.S. oil refinery could tighten gasoline stockpiles. However, analysts said the latest Oil price increase to over $70 a barrel is not justified by current fundamentals and the underlying demand in the market still remains week.

Weak demand was shown in a report released by the Energy Information Administration (EIA) on Wednesday. The EIA said total implied demand for petroleum products over the last 4 week period was down by 6.6% compared with the similar period last year.

Given the lack of any evidence of an economic recovery in the petroleum data, Crude prices may decline next week as low as $67 a barrel, according to analysts. The market is still responding to financial flows, they said, and fundamentals continue to be weak with no sign of strength ahead.