INTERNATIONAL COMMODITY NEWS :
- Brent oil prices fell to the lowest level since July 2004 on Wednesday, as worries over the health of the global economy added to the concerns that a global supply glut may stick around for longer than anticipated. On the ICE Futures Exchange in London, Brent oil for February delivery dipped 70 cents, or 1.94%, to trade at $35.72 a barrel as of 08:48 GMT, or 3:48AM ET, after sinking to $35.54, a level not seen in more than a decade.
- Copper prices edged lower on Wednesday, after data showed that activity in China’s services sector grew at the slowest pace in 17 months in December, the latest indication that the world’s second-largest economy may be losing steam. The Caixin services purchasing managers’ index fell to 50.2 last month from November’s reading of 51.2, disappointing expectations for an uptick to 52.3.
- Natural Gas futures were trading little changed in the domestic market during noon trade on Wednesday as traders weighed bearish weather forecasts which signaled that the current bout of frigid temperatures in the US East Coast are likely to give way to unusually warm weather by the end of the week while next week’s cold blast coming to the Midwest was looking slightly less severe than expected dimming the demand for gas-fired heating at offices and homes in the world’s biggest economy.
ECONOMY NEWS :
- Japan services sector continued to expand in December, with a PMI score of 51.5, the latest survey from Nikkei revealed on Wednesday. That’s down marginally from 51.6 in November, although it remains well above the boom-or-bust line of 50 that separates expansion from contraction. The composite index came in with a score of 52.2 in December, down from 52.3 in the previous month.
- The services sector in China witnessed a mild expansion in December, the latest survey from Caixin showed on Wednesday with a 17-month low PMI score of 50.2. That’s down from 51.2 in November, although it remains barely above the boom-or-bust line of 50 that separates expansion from contraction. The composite index came in with a score of 49.4 in December, down from 50.5 in the previous month while turning to contraction.
- Standard Chartered (L:STAN) is among three lenders that China’s central bank last week suspended from conducting some foreign exchange business until the end of March, two sources with direct knowledge told Reuters on Wednesday. Reuters reported on Dec. 30 that China’s central bank had suspended Deutsche Bank (DE:DBKGn) and two other lenders from conducting some of their foreign exchange business, China’s latest bid to stem capital fleeing the country in the face of a weakening yuan.
TRADING STRATEGY :
- BUY GOLD ABOVE 1085 TARGET 1090 1096 SL 1079
- SELL GOLD BELOW 1078 TARGET 1073 1067 SL 1084