Demand for gold surged to an 11-year high last year. This is due to large-scale purchases on the back of high activity by retail investors and a slowdown of ETF outflows.
OPEC+ is taking a cautious approach on oil, waiting for China's renewed economic activity and new limits on supplies from Russia. Delegates said OPEC+ will stand for preserving the same levels of black gold output at Wednesday's meeting.
China's decision to partially lift COVID restrictions has already boosted tourist’s activity. Domestic traffic increased by 80%. Analysts at Goldman Sachs claimed that the bulls have the upper hand in the commodities markets. Experts from Trafigura anticipated a sharp rise in oil prices as well.
Besides, global supplies of fossil fuels may also decrease. This is due to new sanctions on imports of Russian petroleum products, scheduled to enter into force on February 5. Therefore, oil production in Russia is likely to decline by 15%, as reported by the International Energy Agency (IEA). Moreover, it should be mentioned that Russia is known as the major producer in OPEC+.
But it is still not enough for the coalition to ramp up oil production.
Helima Croft, head of commodity markets strategy at RBC Capital Markets LLC, said oil manufacturers have no plans to boost their output until there are some clear signs that demand in China continues to recover.