Gold is witnessing a decent cut in early trade on Tuesday with prices trading lower by near 0.45% to $1257 per ounce mark. While there are no major cues as per the commodity are concerned, market is probably building into a hawkish scenario from the FOMC meeting. Traders are speculative whether the Fed would extend its trimming down of bond purchase program by another $10 Bln to $65 Bln in the current meeting or not. We feel the recent set of economic cues from the US had not been highly supportive for a highly aggressive policy stance from the Fed. So while the US Central bank is unlikely to hit the block by another round of MBS or Treasury bond cuts, its comments though would be watched carefully. Overall set of markets positivism over the improving labor situation in the US would aid support to the Fed to continue its tightening in coming meetings. With large set of economic cues to be watched today we could see increasing volatility in the commodity. Overall we have a weak bias in Intra-day. Locally the Rupee effect could lead to sharply lower opening. We advice traders to be cautious in the early Asian trade due to RBI policy meeting locally and look for pull-backs to initiate shorts.
Silver prices as of current quote are trading moderately lower and managed to marginally outperform gold both on Monday and Tuesday morning. However, as the day progresses, we have a weak bias in this commodity. Rupee affect which boosted prices yesterday is likely to press a sharply lower start as INR has appreciated modestly in the early session. We feel overall weakness in the base metals complex is also likely to keep prices ranged to negative. Our Technical study also shows, silver prices trading near important support zone. Breach of those supports could be triggered by a negative bias from the Fed meet as per our expectation. We are holding our bearish bias and also on the Ratio Strategy as recommended yesterday
Asian stocks are trading marginally lower this morning tracking overnight US markets and the ceaseless Japanese yen rally. On the economic data front, there are a number of economic cues to be watched with some important ones would be the 4th quarter UK GDP number and later from the US, durable goods order, consumer confidence index. We believe these data might show slight decline from its prior close. However, the upcoming FOMC rate decision, Fed QE3 pace may develop huge progress in the global market during this week. Locally we also have the major monetary policy meeting by the RBI at 11 AM IST. In Bullion, Gold and Silver at Comex standing at $1257 and $19.75 an ounce respectively marginally lower than yesterday’s closing. We believe overall move ahead of the FOMC meeting could continue to be pressurized by the better employment situation in the US and recommend selling for small target in particularly gold in Intra-day
BUY CRUDE ABOVE 6084 ADD MORE ON DISP NEAR 6064 SL 6048 TGT 6120
BUY GOLD MCX FEB ABOVE 29627 ADD MORE ON DIPS NEAR 29584 SL 29555 TGT 29698-29741
COMMODITY MARKET EVENTS FOR DAY TRADING:
| DATE | TIME | Region | Event of the Day | Period | Survey | Prior |
| 28.01.14 | 11:00 | IN | RBI Cash Reserve Ratio | Jan-28 | 4.00% | 4.00% |
| 28.01.14 | 11:00 | IN | RBI Purchase Rate | Jan-28 | 7.75% | 7.75% |
| 28.01.14 | 11:00 | IN | RBI Reverse Repo Rate | Jan-28 | 6.75% | 6.75% |
| 28.01.14 | 15:00 | UK | GDP QoQ | 4Q-A | 0.70% | 0.80% |
| 28.01.14 | 15:00 | UK | GDP YoY | 4Q-A | 2.80% | 1.90% |
| 28.01.14 | 19:00 | US | Durable Goods Order | Dec | 1.70% | 3.50% |
| 28.01.14 | 19:00 | US | Durables Ex Transportation | Dec | 0.70% | 1.20% |