Talking Points:
- Gold price rallied to 3-week high while equities traded subdued
- Oil price held above $40/barrel ahead of oil-producers meeting
- Copper price traded flat amid seasonal demand slack
Oil prices held above $40 per barrel in both WTI and Brent futures, ahead of an oil-producers meeting to discuss an output freeze at January's levels. Major producers from the Middle East and Russia will attend the April 17 summit, although tensions remain after Iran and Libya expressed their non-committal stance. The oversupply currently reigns over oil market sees between 1 million and 2 million barrels of excessive crude produced daily. WTI oil reached a three-week high of $40.75 today and higher moves are not ruled out as the market hopes for a positive outcome.
Gold prices rallied to a three-week high of $1260.06 as US and European equities subsided and the US dollar stayed under pressure against risk currencies. Investors will look to U.S. retails sales data this week for further clues on how the economy is faring, which would affect monetary policy by the Federal Reserve. Gold prices have rallied since early January as investors scaled back projections for U.S. interest rate rises, making it more attractive against interest-bearing assets.
Copper prices traded flat above a seven-week low and support level at $2.0670 amid broad dollar weakness. This support level has held for four sessions thus a breach would likely trigger a sharp sell-off. Asian stocks also traded mutedfor most of the day with Japanese shares dipping on a bullish yen.China's copper producer prices fell less than expected in March and consumer inflation stabilised, signalling that deflationary pressures have abated. Howeveran upcoming slack in seasonal demand may keep prices in check.
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GOLD TECHNICAL ANALYSIS – Gold prices rose within the range of 1207.6-1284.6 and heading to the upper boundary. Upward momentum is building strongly, a sign that this elevation has not yet run its course. Given the stretch so far, a recent top and one-year high of $1284.64 may hold firmly.
Daily Chart - Created Using FXCM Marketscope
COPPER TECHNICAL ANALYSIS – Copper prices formed a head and shoulders pattern after copper failed to return above a resistance level at 2.1485. Prices are trading flat within the range. There is little signal for an upcoming direction.
Daily Chart - Created Using FXCM Marketscope
CRUDE OIL TECHNICAL ANALYSIS – The oil rally continued unperturbed and WTI prices head to the 2016’s high of $41.87. A resistance level at 43.43 comes above that. Momentum has entered overbought area, which may hint at a slowdown period ahead.
Daily Chart - Created Using FXCM Marketscope
--- Written by Nathalie Huynh, Currency Strategist for DailyFX.com
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