While figures yesterday showed weekly U.S. initial jobless claims fell more than expected, other indicators point to slower growth in the country. Orders for durable goods rose less than forecast in July and sales of existing and new homes were weaker than estimated, reports showed this week.
The government may today report the economy expanded at a 1.4 percent pace in the second quarter, the smallest gain in the year-old recovery and less than the 2.4 percent rate earlier estimated.
Crude oil rebounded for a second day as the market awaits the Fed's report. The Fed Chairman Ben Bernanke is expected to unveil more about his policy outlook.
As the broad market sentiment remains fragile after downside surprises from recent economic data, the bounce should be temporary. There're chances that WTI crude oil prices will fall below 70.
Gold is steady since yesterday, as investors wait for a key speech from Federal Reserve chief Ben Bernanke later in the day and expected the U.S. to revise downward its second-quarter economic growth figure. If the figure released comes close to 1.4 percent, it will be pretty bearish on the market, and could provide some safe-haven need for gold.
Our view remains broadly negative over the medium term for metals, there is little question the urgent rebound looks strong, especially for copper and tin, but it is too early to tell whether it is anything other than a pause in the down trend that started early August. While the technical indicators are heading higher we would run with the rebounds, but expect higher prices to attract more selling.
