Talking Points:

  • Gold rallied toward 2015 top, on another day of equities rout
  • Oil bounced above $27 although fundamentals remain weak
  • Copper held steady by short covering while volume dropped

Gold price jumped to a daily top of 1263.48 before it calmed down not so far off. For the record, Reserve Bank of Australia is another central bank to reiterate a wait-and-see mode, after Janet Yellen’s speech yesterday. The stagnation in rate policy coupled with free falls in global stocks have boosted safe haven assets hugely, from fixed income to gold and JPY. This will likely carry on next week.

Oil price bounced back up above $27 today after an encouraging article of coordinated cuts by OPEC on Wall Street Journal, although this was never confirmed. Commodities gingerly hold on to modest gains just in time for the weekend, notwithstanding possible dip buying. After the extreme downward pressure this week, oil will likely react more to upside potential than downside conformation next week.

Copper price continued to trade in a directionless manner, in waiting for China’s re-open next week. Buybacks from short positions were said to be behind the price stability. Volatility will surely pick up next week as all Asian countries return to work.

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GOLD TECHNICAL ANALYSIS – Gold scored another rally toward the top of year 2015 at 1307.4, after it broke through October’s high. There is no sign that the advance may stop soon. On the downside, support trend line offers firm daily support levels.

No Stopping to Gold Upturn and Oil Bounces Even as Equities Plunge

Weekly Chart - Created Using FXCM Marketscope

COPPER TECHNICAL ANALYSIS – Copper price adhered to support level at 2.0020 as downward momentum faded. The metal will likely remain in this proximity until momentum gathers force again. At top, the previous support trend line now turns into a resistance trend line. Only a jump above that would boost chances for an uptrend resumption.

No Stopping to Gold Upturn and Oil Bounces Even as Equities Plunge

Daily Chart - Created Using FXCM Marketscope

CRUDE OIL TECHNICAL ANALYSIS WTI oil extended the comeback today although it stopped ahead of a previous support level at 27.55. A close above this today or higher extensions next week could signal a rebound in oil. No change in flat momentum as yet. New fresh low at 25.80 is a firm support for now.

No Stopping to Gold Upturn and Oil Bounces Even as Equities Plunge

Daily Chart - Created Using FXCM Marketscope

--- Written by Nathalie Huynh, Currency Strategist for DailyFX.com

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Contact and follow Nathalie on Twitter: @nathuynh