Oil and Gold Prices Climb, Inflation in Poland Remains Steady

In recent days, a clear rebound has been observed in many commodities. Interestingly, both oil and gold are rising at the same time, although typically, one of these commodities prefers good times, and the other bad times. Inflation in Poland without any surprises.

Oil price recovery

A semblance of optimism is returning to the market. From Tuesday, oil prices have been rebounding. This commodity is strongly linked to the global economy. Apparently, either we are in for a longer correction of previous declines, or optimism about the economic situation is really increasing. It’s worth noting that the number of active drilling rigs is growing in the US, indicating that future expectations must be optimistic. Also important is the price profitability threshold of production. Not all sources have as low extraction costs as Persian Gulf countries. Therefore, a price drop below $70 could make extraction economically unreasonable.

Gold still on top

Since last Thursday’s decision by the European Central Bank, investors have been looking very favorably at gold. The Polish currency is also doing well, but gold is the main beneficiary. It seemed that after Thursday’s breakout, a quick correction of this move would soon occur. But it did not come. Instead, gold is breaking new all-time records daily. These are not gigantic changes, but it’s clear that investors have taken a liking to this precious metal. Gold was traditionally chosen as an investment in hard times. It also dislikes high interest rates because precious metals do not pay interest. So it should not surprise anyone that in times of drastically declining rates and adverse economic data, investors are looking more favorably at this commodity. On the other hand, better data from the oil market puts the latter into question.

Prices without surprises

On Friday, the final inflation reading in Poland was released. It is a verification of preliminary data based on incomplete information at the time. However, very often these preliminary data are of good quality, and that was also the case in August. The initial reading also showed a rate of 4.3%. The acceleration in the increase of prices is due to the realigned energy prices, which were artificially maintained at a lower level. Unfortunately, as protective programs that helped us get through the hardest times more comfortably are phased out, painful consequences arise.

Today is a public holiday in China and Japan, and in the macroeconomic data calendar, it’s worth paying attention to:

14:00 – Poland – core inflation index,

14:30 – USA – NY Empire State Index.

Maciej Przygórzewski – chief analyst at InternetowyKantor.pl