INTERNATIONAL COMMODITY NEWS :
- Copper futures tumbled to the lowest level in more than six years on Tuesday, as concerns over the health of China’s economy dampened appetite for the red metal.Copper for December delivery on the Comex division of the New York Mercantile Exchange hit an intraday low of $2.225 a pound, a level not seen since July 2009, before trading at $2.234 during morning hours in London, down 1.8 cents, or 0.79%.
- Oil prices remained weak on Tuesday, following a slide of almost 3 percent the previous session, as concerns over Asia’s economic health mounted and as production remained high. “China’s industrial profits declined 8.8 percent in August from a year earlier, with the biggest drops concentrated in producers of coal, oil and metals,” ANZ said on Tuesday. Oil prices, along with most other commodities, have fallen sharply recently, with crude futures losing almost 60 percent of their value since June 2014.
- Gold futures edged lower on Tuesday, as expectations for a U.S. rate hike in the coming months continued to weigh on the precious metal.Gold for December delivery on the Comex division of the New York Mercantile Exchange inched down $5.40, or 0.48%, to trade at $1,126.30 a troy ounce during European morning hours.Gold fell to a five-and-a-half year low of $1,072.30 on July 24 amid speculation the Fed will raise interest rates for the first time since 2006 at some point this year.
ECONOMY NEWS :
- Central bank of India will work with the government to ensure that the benefits of a cut in the policy interest rate is passed on by commercial banks through reductions in their lending rates, Reserve Bank of India Governor Raghuram Rajan said on Tuesday. On Tuesday, the Reserve Bank of India cut its policy interest rate to a 4-1/2 year low of 6.75 percent, in a bigger than-expected move that, with inflation running at record lows, could help an economy in danger of slowing down.
- Billionaire investor activist Carl Icahn ramped up criticism of the U.S. Federal Reserve, warning about the unintended consequences of ultra low interest rates on the economy and financial markets. The Fed’s loose monetary policies have pulled the U.S. economy out of crisis but the cheap credit has also fueled a corporate debt binge and a quest for yield among ordinary investors, who are buying riskier assets such as junk bonds to get a better return.
- A substantial fall in global commodity prices allowed India’s central bank to front-load interest rate reductions with a better-than-expected 50 basis point cut on Tuesday, Reserve Bank of India Governor Raghram Rajan said on Tuesday.The RBI cut its policy interest rate to a 4-1/2 year low of 6.75 percent, in a move that, with inflation running at record lows, could help an economy in danger of slowing down.
TRADING STRATEGY :
- BUY GOLD ABOVE 1127 TARGET 1132 1138 SL 1121
- SELL GOLD BELOW 1120 TARGET 1115 1109 SL 1126