Asian stocks along with the regional benchmark index declined last night after data showing the US service industry failed to beat forecasts combined with US indices declining for the third consecutive day added to investors New Year worries. Investors appear cautious ahead of the upcoming non-farm employment data due to be released on Friday, which could generate huge volatility if it fails to support the decision to start tapering.
Janet Yellen was last night confirmed as the new chairwoman of the Federal Reserve winning the vote 56-26; she will take over from departing Chairman Ben Bernanke when he leaves on January 31st. Yellen a strong advocate of maintaining Fed support to the economy until achieving a ‘Strong Recovery’ should provide a boost to the markets today, especially should the US trade balance data come in favourably at 1.30pm.
With tapering to start in January the New Year has provided a boost for Gold with it rising almost 1% yesterday continuing its surge since on the year, up almost 3.5% so far. General outlook for Gold in 2014 appeared negative after prices plummeting last year forced Gold miners to cut reserves however strong Asian demand coupled with reports India may reduce import duties on gold and an appearance of being cheap may have pushed investors into the old reliable ‘quality’ investment.