INTERNATIONAL COMMODITY NEWS :
- Gold struggled near one-week lows on Tuesday, ahead of a widely anticipated U.S. rate hike by the Federal Reserve.The Fed is expected to raise interest rates for the first time in nearly a decade at the conclusion of its two day policy meeting at 2:00PM ET on Wednesday. The central bank will also release its latest forecasts for economic growth and interest rates.
- Oil prices resumed their decline on Tuesday, one day after bouncing off seven-year lows, as worries that a global supply glut may stick around for longer than anticipated continued to weigh.Oil futures have fallen almost 15% since December 4, when the Organization of the Petroleum Exporting Countries failed to agree on output targets to reduce a glut of oversupply on global energy markets.
- Copper futures were up 0.16% at Rs 319.25 per kg today as speculators enlarged bets, largely in step with a firming trend in base metals at the London Metal Exchange (LME).At Multi Commodity Exchange, copper for delivery in February next year rose 50 paise, or 0.16%, at Rs 319.25 per kg, in a turnover of 4,681 lots.
ECONOMY NEWS :
- Japanese firms’ inflation expectations fell from three months ago as slumping oil costs weighed on underlying price growth, a Bank of Japan survey showed on Tuesday, adding to doubts on the effectiveness of the central bank’s massive stimulus programme.The outcome may heighten market expectation of near-term monetary easing since BOJ Governor Haruhiko Kuroda has said the bank won’t hesitate to act if sliding inflation and overseas headwinds discourage firms from raising prices, analysts said.
- Janet Yellen is guiding the Federal Reserve towards its first rate rise in a decade armed with traditional economic models that some economists worry could fail her in a world of massive money printing and near zero rates. The 69-year-old economist argues the time is coming for a rate-lift-off even though inflation has yet to accelerate, trusting decades of studies that suggest a tight labour market eventually creates inflationary pressures.
- China’s central bank is on guard against a sudden attack on the yuan in offshore markets, and is ready to intervene if the gap between offshore and onshore exchange rates becomes destabilizing, sources involved in policy discussions say. Though the People’s Bank of China (PBOC) wants to avoid a sharp depreciation in the currency, it is comfortable with further weakening of the yuan against the dollar, policy insiders said, especially as the U.S. Federal Reserve is expected to raise interest rates on Wednesday for the first time since 2006.
TRADING STRATEGY :
- BUY GOLD ABOVE 1070 TARGET 1075 1081 SL 1064
- SELL GOLD BELOW 1062 TARGET 1053 1047 SL 1067