Talking Points:
- Gold price stabilized at lower end due to pressure from risk rally
- Oil price steadied as Chinese growth concerns countered Friday’s rally
- Copper price garnered modest support from rising housing investment
On the verge of upcoming Federal Reserve meeting this week, money managers continued to add long gold positions, according to a weekly report by U.S. Commodity Futures Trading Commission (CFTC). A risk rally late following the ECB’s easing package last week sent gold price lower. However further support came by way of growth concerns due to China’s lowest industrial production (IP) since the 2008 financial crisis.
Risk assets face challenges at topside today after Chinese data on Saturday disappointed. Copper price barely hangs on to support trend line. Chinese retail sales grow below forecast, although fixed asset investment climbs on the back of residential housing. The latter figure could offer supportive signal to copper which is used extensively in construction.
Oil price was steady in early Asian trading as prospects of falling crude production were countered by global growth concerns. It advanced 2 percent on Friday for a fourth straight week, after the world's energy watchdog said the market may have hit bottom. International Energy Agency – part of the OECD – published an assessment that the reduction by US shale industry and OPEC sufficiently downplayed an increase by Iran.
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GOLD TECHNICAL ANALYSIS – Gold price retreated below $1275 after a wave of selling in haven assets on Friday. Prices however remain above 20-day moving average and a firm support, at 1238.6. Downward pressure has returned in the last few sessions, making a test of support possible.
Daily Chart - Created Using FXCM Marketscope
COPPER TECHNICAL ANALYSIS – Copper’s daily closing hung on to support trend line, in spite of intraday moves below it. A slight upside bias is not strong enough to bring copper back up to 2.300 level achieved last week. A bounce in momentum signals would be beneficial.
Daily Chart - Created Using FXCM Marketscope
CRUDE OIL TECHNICAL ANALYSIS – Oil price hovered around previous resistance level at 38.36, unable to complete a clean break above it. Flat momentum signals that the consolidation may prolong. Next resistance is found at November’s high 43.22.
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
