Gold price staged and grabbed the 900 level again after finally support at 874.2 as stocks plunged and worldwide central banks' spending of trillions to rescue the financial system will eventually turn out to be currency-depreciating. The Dow Jones Industrial Average lost 2.7% to close at 8149 Thursday as corporate earnings were disappointing. Auto insurance company Allstate recorded its first losing year after listing while aircraft maker Textron posted a quarterly loss and will probably miss consensus on 2009 earnings. Both stocks slumped by more than 20% after the announcements. Asian equity market followed the footsteps of the US market with the MSCI Asia Pacific Index losing more than 2% in morning session while Japan's Nikkei Stock Average plunging 3.4%. Financial and auto sectors led the fall.

Apart from the US' pledge of $819B stimulus package, the German government announced to spend 80B euro over the coming 2 years while the Chinese government planned to spend RMB 4 trillions on developing the nation's infrastructure. These huge spending is expected to induce to countries to 'create' more money and will finally cause weaknesses in currencies. Therefore, investors turn to gold and other precious metals for stores of values.

Hovering around 40/41 level, the crude oil benchmark futures will likely record a 10% decline over the past week. Investors' concerns were still on the demand side after seeing another week of large oil stockpile accumulated in the US and IMF' downward revision in global economic growth. Efforts from OPEC, and non-OPEC, to balance the demand destruction through cutting output did not show much help in bolstering price.

Yesterday, we mentioned that oil price was supported by some transient factors which will not last for long. Here comes one more: The United Steelworkers union rejected a contract offered by Royal Dutch Shell and has planned for a strike which will likely cause suspension in refinery of over 60% of oil in the US. Nymex gasoline for February delivery soared 5% after the news was reported. It's actually the third contract offered by Shell which offered union workers a 3-year contract with 2.5% hourly wage increment in the second and third year, together with a $500 signing bonus. However, the workers are looking for substantial wage increase.

Natural gas inventory dropped by a more-than-expected 186 bcf, compared with average drop of 186 bcf, to 2.374 trillion cubic feet for the week ended Jan 23 as the abnormal cold weather finally helped demand. Natural gas price rebounded to as high as 4.648 from 4.36 after the report and ended the day with 4% gain.

We forecast natural gas price will remain low in Q1 and Q2 after the cold weather has gone as industrial and power generation demands are still weak. However, the situation may gradually change when investors realized that rig counts are falling.