Mecklai: Falling oil, gold prices to lower trade deficit

The Graph of the Day today depicts declining prices of Gold and Oil. These commodities are well known to signal the development of the global economy. Gold dipped below $ 1700 and posted a low of $ 1699 yesterday. This was the lowest mark since Sept.7. The contraction in prices is on account of assets held in exchange traded products by major as well as developing economies. Assets held in exchange traded products expanded 9.7 % this year as almost all countries central banks over the globe have concentrated towards steps to bolster the economy.

When it comes to Oil prices they have been trading near the lowest levels. Oil posted a near to the ground close since July as the oil inventories have increased then forecast and the demand has slashed considerably. The oil stockpiles increased to 375.1 million barrels this is the highest figure while the U. S. government started reporting inventories since 1982. Oil production boosted to 6.61 million barrels a day, which is the highest since past 17 years.

Thus to conclude, the declining prices would lower the trade deficit of the various global economies i.e. the imports cost would reduce. This cannot be existent for a very considerable time as with low prices the demand for these two commodities would pick up with time.

The below graph Displays the prices of Gold and Oil

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