INTERNATIONAL COMMODITY NEWS :
- Gold futures were higher in European trade on Tuesday, adding to modest overnight gains, as investors looked ahead to key U.S. inflation data due later in the session to gauge if the world’s largest economy is strong enough to withstand further rate hikes in 2016.
- Oil prices rose to fresh seven-month highs in European trade on Tuesday,adding to sharp overnight gains amid mounting concerns over global supply disruptions.Oil prices have been well-supported in recent sessions due to a combination of Nigerian,Libyan and Venezuelan supply outages, declining U.S. shale output and reduced production of Canadian crude as a result of fires in Alberta’s oil sands region.
- Silver futures rallied in the domestic market on Tuesday as investors and speculators booked fresh positions in the precious metal ahead of key US consumer price data which may dictate the likely trajectory of US interest rate movement this year. Data released on Monday showed that manufacturing activity in New York shrank in May following three months of expansion amid weakness in new orders and inventories signaling softness in the American manufacturing sector.
ECONOMY NEWS :
- The main concern regarding the financial stability of banks in the euro zone is that new EU rules on rescuing lenders without using taxpayers’ money have not yet been tested on them, the European Central Bank’s chief economist said on Tuesday.Speaking at a conference in Brussels, Peter Praet said that financial stability has been enhanced but added that “the main concern is that bail-in for large and complex institutions has not been tested yet”.
- The euro zone banking sector is facing a severe profitability shock, European Central Bank chief economist Peter Praet said on Tuesday, pointing to high costs, an excessive amount of bad debt in some countries and the lack of necessary consolidation.”We have in the sector a severe profitability shock,” Praet told a conference in Brussels.Praet said the sector would benefit from the formation of pan-European banking groups and the completion of the banking union.
- A recent poll taken ahead of the June 23 referendum to decide on the U.K.’s membership in the European Union (EU) showed Tuesday that those preferring to leave surpassed those wishing to remain, though one out of every five Britons were still undecided.The TNS survey showed that those British citizens preferring a Brexit, as the preference to leave the EU is known, rose by five points to 41%, while support for the Remain camp slipped one point to 38%.
TRADING STRATEGY :
- BUY GOLD ABOVE 1272 TARGET 1277 1283 SL 1267
- SELL GOLD BELOW 1268.8 TARGET 1263.8 1257.8 SL 1273.8