Gold Daily Fundamental Analysis Gold maintained the fluctuations on Tuesday with an upside bias on inflation support alongside debt woes and a weak dollar, all bolstering the metal’s gains. The upside support for gold started form the early hours in Asia, where the relief rally continued to keep the dollar gains at bay while inflation figures stimulated hedge demand all over again. China reported rising May inflation to 5.5% at the fastest pace in almost three years and the PBoC acted directly by raising reserve requirements for banks again. India’s inflation also accelerated in May and U.K.’s inflation held at 4.5% the highest since October 2008. Rising food and energy prices are still finding their way to consumers’ pockets and headline inflation is still a pressure on a fragile recovery and policy makers. Inflation in the United States at factor gates also rallied ahead of the CPI index on Wednesday that is also expected with gains, which shall keep the metal biased to the upside on inflation hedge offsetting the slimming talk of the third round of quantitative easing. The debt crisis is Europe remains upside support even amid the euro’s relief rally. We saw fears only temporarily ease with successful debt sales from Greece and Spain yet the debate over the bailout for Greece is still ongoing and uncertainty over investors portion of aid remain agonizing for the market. Standard & Poor’s slashed Greece credit rating by three notches to CCC from B to become the world’s lowest and just shy from a D as they warned of the rising risk for default. They also called on the EU to be rational in their way as they warned like Moody’s from any compulsory and unfavorable terms of debt restricting, as extending maturities and swaps will also account as default. This prevailing uncertainty remain overall support for the metal that is sustaining the upside power. The dollar is fragile and less than expected drop in retail sales from the United States helped ease jitters over quick recovery slump. We can see that the market liquidity remains very high for a third round of QE and also high supply to slump back in recession, yet that does not still contain the general appeal of the bullion as a hedge and as a safe haven. We expect the fluctuations to continue for the metal on Wednesday with heavy data on the queue from the United States with more focus on the Consumer Price Index, while the EU finance chiefs continue their negotiations and comments from the euro area will be under heavy vigilance. The volatility might dominate with the U.S. dollar poised to fight for a comeback that might pressure gold, yet debt and inflation pressures are surely to support the metal. Crude Oil Daily Fundamental Analysis Crude oil prices rose on Tuesday after data from China and the United States suggested the slowdown won’t be as bad as initially thought, where industrial production rose in China, while retail sales in the United States dropped in May but better than expectations, which sparked optimism among investors over the outlook for global growth. More data will be released from the United States on Wednesday, where data from the U.S. manufacturing and industrial sectors are likely to play an important role in determining crude oil prices on Wednesday. Moreover, the EIA will release the inventories report, which is expected to show that crude oil inventories fell last week. Accordingly, we expect volatile trading on Wednesday, and given optimism will continue in markets, crude oil prices might rise on Wednesday as well. Wednesday June 15: At 12:30 GMT, Canada will release the manufacturing sales index for April, where the index is expected to drop by 2.3%, compared with the prior rise of 1.9% in March. At 12:30 GMT, the U.S. will release the consumer price index for May, where CPI is expected to rise by 0.1% in May, compared with the prior rise of 0.4%, while compared with a year earlier, CPI is expected to rise by 3.3%, up from the prior rise of 3.2%. Core CPI is expected to rise by 0.2%, in line with the prior rise in April, while compared with a year earlier, Core CPI is expected to rise by 1.4%, compared with the prior rise of 1.3%. At 12:30 GMT, the U.S. will release the empire manufacturing index for the month of June, which is expected to show that manufacturing activities increased to 13.50, compared with the prior estimate of 11.88. At 13:00 GMT, the U.S. will release the total net TIC flows for April, which rose by $116.0 billion in March, while net long term TIC flows will be also released for April, noting it rose in March by $24.0 billion. At 13:15 GMT, the U.S, will release the industrial production report for May, where industrial production is expected to rise by 0.3%, compared with the prior flat estimate, while capacity utilization is expected to rise to 77.1% in May up from 76.9% in April. At 14:30 GMT, the EIA report for crude oil inventories will be released for the week ending June 10, where last week crude oil inventories decreased by 4.8 million barrels, and Wednesday’s report is expected to show that crude oil stockpiles fell by 1.9 million barrels. Natural Gas Daily Fundamental Analysis Natural gas prices fell on Tuesday as weather forecasts are showing temperatures will be below their average for this time of the year in the U.S. Northeast, which will reduce demand for power-plant fuel, and accordingly, natural gas prices dropped after rising last week on expectations of warm weather conditions. Natural gas prices could still drop on Wednesday so long as weather forecasts continue to show below average temperatures, although we don’t expect the drop in prices to continue for an extended period, since weather forecasts suggest the last week of June will witness a rise in temperatures, while industrial production data from the United States could also affect natural gas prices on Wednesday.

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