Analysis

	World Financial Market Summary of May 12th, 2008.

Brent oil price is currently over 125.85 dollars per barrel. Such an impressive rise (the strongest weekly growth for the year) is accounted for by reduction of supplies from Nigeria prior to the vacation season. Moreover, OPEC has announced that there is no necessity to increase oil production even if the crude oil price reaches 200 dollars per barrel. Small local corrections connected with profit-taking have not yet resulted in any signals of a turn. Thus, there is nothing to indicate a possible reduction of crude oil prices. As for gold, it is getting cheaper. An attempt to break through 890 dollars per troy ounce has not yet succeeded and the price went up to 870 dollars per ounce. However, these events were preceded by a rapid fall of prices from 895 to 845, then a less active raise to 883 dollars per ounce and finally to the above-mentioned 890 dollars per ounce. Thus the correction from the March low of 1,033 dollars per ounce comprised almost 200 dollars. The low in early May at 845.6 dollars per ounce directly corresponds to a 38% Fibonacci correction of the growth from 542 dollars per ounce in June 2006 to 1033 dollars per ounce in March this year. The 845 dollar level remains an important support for the raising trend. If the price goes down, the levels of 820, 800 and 700 dollars per ounce may be expected. So far the price has been higher. In short and mid-term the price over 900 dollars per ounce may be expected. Silver is being traded in the narrow range of 16 and 17.10 dollars per ounce. The German Stock Index DAX has reached the important resistance of 7,100 points. A small correction to 6.960 points has not yet cooled off the bulls. The American Dow Jones Index has gone down from 13, 130 to 12, 720 points. After the FRS meeting there is hope that even the most complicated problems connected with the liquidity and mortgage crisis may be solved. In addition to the rate reduction the FRS suggested that interest should accrue on reserves of the credited banks. But due to the fact that the USA prosecution office is investigating whether fraud was one of the reasons for the mortgage crisis, this is not very likely to happen. Neither the reduction of the US trade balance deficit to 58.2 billion dollars nor revitalization of the capital market or general improvement of the economic situation can prevent that.