INTERNATIONAL CURRENCY BUZZ :
- Silver futures retreated during noon trade in the domestic market on Monday as investors and speculators exited positions in the precious metal tracking weakness in the bullion internationally as a slightly stronger dollar curbed the lure for silver as an alternative asset.Stronger greenback makes silver more expensive for those holding other currencies thus dimming bullion demand.
- Gold futures were lower in European trade on Monday, falling for the second straight session as the U.S. dollar recovered from losses suffered in wake of the Federal Reserve’s dovish statement.The dollar continued to recover from five-month lows as investors closed out bearish bets following an aggressive selloff late last week.
- Oil prices slid for a second day on Monday, under pressure from signs that some of the nimbler U.S. producers increased drilling last week and from uncertainty surrounding a meeting of the world’s major exporters next month to discuss freezing output.U.S. energy firms last week added one oil rig after 12 weeks of cuts, according to data from industry firm Baker Hughes.
ECONOMY NEWS :
- China has many policy tools at its disposal to fend off financial risks and will improve its communication with markets, Premier Li Keqiang said on Monday.Li told the visiting International Monetary Fund Managing Director Christine Lagarde that China will not rely on yuan depreciation to spur exports.
- China agreed on Monday to consider building a railway into Nepal and to start a feasibility study for a free trade agreement with the impoverished, landlocked country, which has been trying to lessen its dependence on its big neighbour to the south, India.The Himalayan nation, that serves as a natural buffer between China and India, adopted its first post-monarchy constitution in September hoping this would usher in peace and stability after years of conflict.
- U.S. inflation is likely to accelerate in coming years and move toward the Federal Reserve’s 2 percent target, Richmond Fed President Jeffrey Lacker said on Monday, flagging upside risks to price growth.Inflation has been unusually sluggish since the 2007-2009 recession.The Fed has kept interest rates low in part to foster faster price gains and said last week it was likely to raise interest rates more slowly than policymakers had expected in December.
TRADING STRATEGY :
- BUY GOLD ABOVE 1250 TARGET 1270 1300 SL 1220
- SELL GOLD BELOW 1240 TARGET 1220 1190 SL 1270