Talking Points:

  • Gold persistently climbed with interests coming from high market volatility
  • Oil recovered on short-covering and news of confirmed producers meeting
  • Copper, metalsbounced after China central bank reinstated a slight easing bias

Risk assets gained lee way from a G20 summit starting today in Shanghai, China. Asian stock indices and copper posted gains, while oil and gold traded range-bound - notwithstanding short-covering ahead of G20 and the weekend.

Oil price jumped 3 percent on a second day of recovery, partly aided by news of a meeting of Saudi Arabia, Russia, Qatar, and Venezuela at middle of March. This gains revived other commodities and broad risk sentiment. However market participants are sceptical about the productivity of this meeting after the same parties failed to reach a formal agreement this month.

There is no stopping to the persistent climb in gold price, even as risk made a return right before G20 summit. Volatility in FX and equity market warranties constant flows into gold and JPY as safe haven, for the time being. During the course of this week there were sessions of risk-selling and risk-buying, even in the absence of macro development.

A measure of market (and stock) volatility, the Chicago Board Options Exchange SPX Volatility Index, remains near its half-yearly high even after a considerable reduction in the last 2 weeks.

Copper Bounces with Stocks, Gold Solidifies amid Market Volatility

Chart by author. Data from Bloomberg & Chicago Board of Trade

Copper price bounced up from a low closing yesterday as investors flocked into risk assets and particularly industrial metals again. Apart from anticipation of stimulus action at G20 summit, copper also got a leg up as China’s central bank head implied that it has sufficient tools to implement a “slight easing bias”. All look good for copper and metals coming into next week.

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GOLD TECHNICAL ANALYSIS – Gold price consistently climbed up, almost oblivious to the risk-on / risk-off movements this week and macro-economic developments. Moving averages are forming uptrend signal, although momentum remains rather flat – a hint to gradual pace.

Copper Bounces with Stocks, Gold Solidifies amid Market Volatility

Daily Chart - Created Using FXCM Marketscope

COPPER TECHNICAL ANALYSIS – Copper price bounced up after a noticeable decline yesterday. General momentum still points to further downside development which may imply trouble for long term investors. At the topside, a resistance at 2.1485 and past daily highs in 2.11s region are holding firmly.

Copper Bounces with Stocks, Gold Solidifies amid Market Volatility

Daily Chart - Created Using FXCM Marketscope

CRUDE OIL TECHNICAL ANALYSIS Oil price stick to the upside of this week’s daily trading band, however momentum seems not strong enough to enforce a breach of 34.25 resistance level. Coming to the end of the week and given event risk in Asia, oil may trade muted with a slight upside bias.

Copper Bounces with Stocks, Gold Solidifies amid Market Volatility

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