INTERNATIONAL COMMODITY NEWS :
- Gold prices fell by 0.28 per cent on Tuesday as participants booked profits at prevailing higher levels even as the precious metal glittered overseas. Traders attributed the fall in gold futures to profit-booking by traders at existing levels. However a firm trend overseas on speculation that the US central bank will be slow to tighten policy further bolstering the metal’s appeal as the dollar sagged.
- Crude oil prices rose by 0.07 per cent on Tuesday as the dollar slipped to an 18-month low against the yen potentially spurring fuel demand. Higher oil came on the back of a slumping dollar which makes purchases of dollar-traded fuel cheaper for countries using other currencies potentially spurring demand as well as strong investor interest in oil.
- Lead prices fell by 0.75 per cent on Tuesday as a result of low demand for the commodity from battery-maker in the spot market in the midst of weak overseas trend. At the MCX Lead futures for the May 2016 contract is trading at Rs 118.60 per kg down by 0.75 per cent after opening at Rs 118.95 against a previous close of Rs 119.50.
ECONOMY NEWS :
- UK factory activity contracted to 49.2 in April from revised 50.7 in March, survey data from Markit showed Tuesday. It was forecast to rise to 51.2 from March’s originally estimated value of 51. The reading fell below the critical no-change mark of 50.0 for the first time since March 2013. The headline index was dragged lower by lacklustre trends in production and new orders and declines in both employment and stocks of purchases.
- The global economic growth will remain weak and is forecast to pick up only modestly by 3.1% in 2016 and 3.4% in 2017, according to a latest economic forecast by the European Commission today. The outlook for global GDP growth has weakened further as major advanced economies also slowed, and expectations of a modest pick-up are subject to a high degree of uncertainty. It attributed the slow pace of the gross domestic product growth globally to a slowdown in emerging markets, saying growth outside the European Union fell last year to its slowest rate since 2009. The previous outlook for global growth stood at 3.3% for 2016 and 3.5% for next year.
- The weakness of emerging economies could prove lasting as deep-seated structural problems rather than fleeting troubles are the root cause, posing a risk to growth even in advanced economies, the European Central Bank said on Tuesday. ECB President Mario Draghi has repeatedly cited subdued growth in emerging market as a drag on the euro area recovery and one of the reasons underpinning its ultra-easy policies.
TRADING STRATEGY :
- BUY GOLD ABOVE 1301 TARGET 1306 1312 SL BELOW 1296
- SELL GOLD BELOW 1288 TARGET 1283 1277 SL ABOVE 1293