Gold price lost today, concurrent to large gains in commodities and a rebound in stock markets upon new of stimulus from China. The upcoming G20 meeting with an agenda to tackle China slowdown and growth has also provided market with expectation of concerted efforts. moderation

Meanwhile, China commenced its transformation of the financial market, as widely anticipated. On Saturday, Chairman of the China Securities Regulatory Commission Xiao Gang was replaced by central bank veteran Liu Shiyu. Gang was held accountable for the stock collapse last year. This move is undoubtedly encouraging to investors and signaled the government’s determination to tackle market instability.

Oil price bounced back strongly to $32 region after a slide to close below $30 on Friday. Oil-positive news over the weekend included another drop in US drilling rigs (recorded by Baker Hughes), IEA’s forecast of falling US shale oil production, and March 1 target date for an output freeze pact. Initially discussed by Russia and Saudi Arabia, it may extend to include Venezuela, Iran, Mexico and Norway. However this remains a work-in-progress with no formal OPEC affirmation, keeping oil price in a range.

Copper price rose together with Chinese stocks today. Shanghai Composite jumped 2 percent, led by property and resources shares. Investors welcomed Beijing’s decision to overhaul the regulatory body andto limit land supply to residential development projects to stem the property glut. More stimulus steps are anticipated in the next few days which the market hopes may address copper and steel industry.

GOLD TECHNICAL ANALYSIS – Gold’s consolidation persists in 1200 area and above the support trend line. With momentum signals still within the range albeit slightly biased to topside, this situation may go on for some time. Traders should prepare for downside volatility that may lead gold to test support.