Gold futures for December delivery touches 1000, the highest level since February. Spot gold also rises to 6-month high at 997.2. However, investors should beware that volume is thin and pullback may occur quickly on profit-taking. At the G-20 summit in London, world policymakers pledged to help revive global economy. While acknowledging the improvements seen in recent months, officials believed that recovery will not be sustainable without continued stimulus policies. That is, governments will continue to offer helps in forms of low interest rate, expansion of money supplies and other fiscal stimuli. These policies will result in high inflation should economic growth comes back. This is probably the reason for investors’ flight to gold.
Silver price rises almost +1% to 16.51 today, extending its 8th consecutive days of rally. Investors should not build long positions too aggressive at current level as the metal is in overbought territory and should have correction soon.
The energy complex moves within a narrow range in Asia Tuesday. The October contract for WTI crude oil trades steadily around 68 as investors awaits OPEC’s comments on market outlooks. Brent crude, currently recovered to 67, dropped -0.4% to close at 66.53 yesterday. Since the beginning of September, WTI crude has returned to premium above Brent at the front end. The phenomenon is probably brought by draws in crude oil inventory and signs of pickup in product demands.
Others in the complex have little changes with heating oil trading at 1.73 and gasoline at 1.77. Natural gas slides -2.3% to 2.66, paring the +8.8% gains made last Friday. Electronic trades on NYMEX will be booked today for settlement purpose.
Stock markets edge slightly higher as driven by financial and technology sectors. The MSCI Asia Pacific Index gains +0.4%. In Japan, Nikkei 225 Stock Average adds +0.2% to 10345 although current accounts surplus narrowed to 1.16 trillion yen in July, more than consensus of 1.41 trillion yen, from 1.8 trillion yen in the previous month. Japan’s economy relies on exports, such as heavy machinery and electronic products, heavily. The decline in surplus was probably attributed to strength in Japanese yen as well as slow recovery in global market.
In Australia, NAB business confidence jumped to 18 in August, the highest level in 6 years, from 10 a month ago. The good news lifts banking and commodity shares with National Australia Bank and BHP Billiton rising +3% and +1% respectively.
