Gold price continues to trade narrowly around 900 level as traders are waiting for rate decisions in ECB and BoE today before any actions.

After the meeting in January, ECB Chairman Trichet explicitly told the public there would be no rate cut in February as the members need to gather more data and information which are not available until March for evaluating the economy. For BoE, the market has widely factored in another 50 bps cut to 1%. Of the same importance is the UK's inflation report which will also be released today. In November's report, the MPC said that the nation inflation is expected to come in significantly below target and then aggressive rate cuts and stimulus plans followed.

Recent stimulus packages announced by governments around the world include capital injection, buyout of toxic assets as well as reduction in tax. The activities are expected to increase governments' debts and bloating of governments' liabilities will led to collapse in currency and bond markets. Investors worrying about these issues should flee to gold for safe-haven.

WTI crude oil price slid to 39.74 from 41.92 after the US Energy Department reported addition of 7.2mmb of crude stockpiles for the week ended Jan30. Although the benchmark was still able to close above 40 yesterday, near-term outlook is biased to the downside amid incrementally weak economic data.

OPEC, the cartel controlling over 40% of the world's oil export, has endeavored to reduce supply as we can see from the strengthened Dubai timespreads and tightened Brent-Dubai spreads. However, demand has deteriorated much more rapidly that OPEC's hard work does not seem to be very effective.