OJSC «Seligdar»

August proved to be an extremely quiet month for the stock market, and consequently for the precious metal market. IN the beginning of the month, bear trend was established on the stock market and investors were actively buying precious metals as reliable hedge. Besides that, decrease of oil prices was expected after expiration of September futures, adding to the interest towards hedging assets. However, the “miracle” did not happen – by the date of expiration of the oil futures (August 15 for Brent and August 17 for WTI) the oil prices rocketed to the 10-monthly maxima, which naturally attracted investors and caused extensive sales on the market of gold and other precious metals. However, no active movements occurred, and in contrast to world market, the gold price on the Russian market increased as a consequence of strengthening of dollar compared to ruble.

Technically, gold is still traded in the range of $930-960/ounce with the strong upwards support channel at the level of $930/ounce, wherefore the experts do not expect correction below this level in the upcoming weeks.

Several important events for the gold market are expected within a few next weeks: first of all, it is the anticipated recovery of the markets and end or recession. The risks are gradually decreasing, which is on one hand favorable for the American currency, and on the other hand creating pressure against gold market, driving sales of the hedging metal. Another important aspect is the ending of the market support program earlier announced by the US authorities in order to support liquidity of the financial system. Removal of the cheap state money from the system will create significant shortage of liquidity, which can provoke growth of prices for assets, including precious metals. We expect preservation of a moderate upward trend in the gold prices during the next month, not excluding rising to the upper level of the corridor at $960/ounce. Increasing trend is also preserved on the platinum and silver markets, with no visible causes to change it in the near future.

Gold prices at LME (June 2009-Aug.  2009)

Silver prices at LME (June 2009-Aug.  2009)