Gold Prices Fall Amid Rate Jitters; Copper Steady as China Stimulus Eyed 
The mega-selloffs that began on Thursday and pushed the German DAX (GER30 in CFD) to trade as low as 10320 from a peak of 10777 may not be over. The German benchmark index, on Tuesday, found support on the 50-day moving average but on Wednesday, it was down and back testing the support again. We expect the index to slide further and try to test support below 10000 mark and around 9500 area.
That is because the risks to the region remain elevated and the European Central Bank (ECB) is not likely to expand its asset purchases in the very near term. We expect the very next move by the ECB would be to cut interest rate to -0.5 percent from current -0.4 percent. Over the course of next year, big uncertainties surround Europe and that includes Germany and as of now, the market hasn’t priced it. There is a strong possibility that the better showing by the right-wing populists in the election would continue and that makes German Chancellor Angela Merkel’s return to her chancellery very difficult. In the latest regional election, the newly formed right-wing Alternative for Germany (AfD) party has beaten Merkel’s Christian Democratic Union (CDU) and that was her home turf in Mecklenburg-Vorpommern State.
In addition to that, despite the ambitious easing from the ECB, the inflation remains a dream for the region, while growth has been disappointing. With such risks looming, we don’t expect a bull run from DAX.
