INTERNATIONAL COMMODITY NEWS :
- Natural Gas futures fell during noon trade in the domestic market on Friday as investors and speculators exited positions in the energy commodity after a bigger than expected increase in US crude stockpiles signaled a worsening supply glut. The EIA said that US crude inventories rose by 71 billion cubic feet in the week ended May 20 2016 above the 68 billion cubic feet increase expected by analysts.
- Silver futures were trading lower during late morning trade on Friday as investors and speculators resorted to a cautious stance amid rising speculation that the US Federal Reserve will lift interest rates in June or July dimming the lure for the bullion as a store of value.St. Louis Fed President James Bullard on Thursday said that financial markets are correctly reading the chances of June rate hike adding that a tighter labour market may exert upward pressure on inflation.
- Crude oil prices fell by 0.69 per cent on Friday as investors were worried that higher prices could reactivate shuttered crude output adding to global oversupply. Prices were also pressured by a strong greenback that was buoyed by generally positive US economic data amid growing expectations of a near-term rate hike. A stronger dollar reduced the appeal of the fuel as an alternative asset. Stronger greenback makes the fuel expensive for those holding other currencies thus reducing demand.
ECONOMY NEWS :
- The European Central Bank’s nascent policy on working off bad bank loans may be extended to smaller lenders not directly supervised by the ECB, its chief supervisor said on Friday.The ECB is crafting new guidelines aimed at forcing banks, especially in financially stretched countries such as Italy, Greece and Portugal, to reduce the pile of soured credit sitting on their balance sheet.
- China’s central bank condemned two recent news reports from foreign media about the country’s currency reforms and monetary policy, the People’s Bank of China (PBOC) said on its official weibo account on Friday. The reports “fabricated facts, misled readers, misled markets,” the statement said, adding the central bank would investigate taking legal action.
- Federal Reserve (Fed) chair Janet Yellen will make her first public appearance since the hawkish tone in the minutes from the U.S. central bank’s last policy move forced markets to recalibrate expectations for the continuation of monetary policy tightening.The minutes themselves along with a string of Fed officials insisting that the June 14-15 meeting was live pushed the odds of rate hike at the next gathering from 4% before the publication of the minutes to close to 40%. However, Fed fund futures have since backed down and placed the odds at 26% as of close of market yesterday.
TRADING STRATEGY :
- BUY GOLD ABOVE 1223 TARGET 1228 1234 SL BELOW 1218
- SELL GOLD BELOW 1199.7 TARGET 1194.7 1188.7 SL ABOVE 1204.7