Crude oil hovers around 80 in European morning after gaining more than +4% in the past 3 days. Others in the energy complex also pull back with RBOB gasoline sliding to 2 and heating oil to 2.07. On the other hand, gold price continues to trade firmly above 1080.

We may not see new high for gold today as price should consolidate for a little while after the 3-day rally. However, the correction should not be deep as supporting forces including central bank diversification, broad-based weakness in USD and rising inflationary expectations remain intact.

According to SPDR Gold Trust, bullion holdings rose to 1108.4 metric tons as of November 3, the biggest increase in a month.

Market's focus has turned to ECB and BOE meetings. USD recovers from yesterday's low as both European central banks are likely to keep interest rates unchanged. The ECB is expected to keep the main refinancing rate unchanged at 1% this month. As the Governing Council will release a new set of staff projections in December, we do not expect much new information to be sent out by policymakers. ECB President Trichet should continue to describe current interest rate as 'appropriate' while growth and inflation risks as 'broadly balanced'. At the press conference, however, investors may pay attention to questions about new 12-month tender operation. It's interesting to know if the central bank will charge a margin over the policy rate.

For BOE, the most important issue is whether the central bank will extend the 175B-pound asset purchase program as keeping the policy rate at 0.5% is widely anticipated. There have been rising bets on the expansion after the UK reported economic contraction of -0.4% qoq in 3Q09. The reading made the nation's economy worrisome as countries such as US, Germany and France have already returned to growth.

UK stocks decline despite better-than-expected industrial production in September. In the Eurozone, retail sales surprisingly contracted -0.7% mom (consensus: +0.2%) in September following a -0.1% decline a month ago. This translated in annual drop of -3.6%. As a result, Germany's DAX and France's CAC 40 slide -0.6% and -0.7% respectively.

Earlier in Asian session, the MSCI Asia Pacific Index dropped -0.4% as New Zealand's unemployment rose to 6.5% in 3Q09 from 6% in the prior month. Moreover, South Korea's Finance Minister said he's uncertain of the nation's economic growth is unsustainable as it remains too dependent on external demand. This diminished investors' risk appetite.