A persistent weakness in USD continued to prop up commodity prices from oil, copper to gold. The risk-on sentiment across assets further instilled support to risk assets.
After Monday’s 5.6 percent jump in WTI oil price, Brent oil scored another 5.4 percent in the Asian morning. Indication of supply slowdown and demand pick-up were said to be behind the additional buying.Genscape’s data released on Monday showed a smaller than expected stock build at Cushing, Oklahoma, whereas a number of Latin Americannations are meeting this week to discussoil output. Demand prospects also look good with upbeat economic data from the U.S. and on-going reforms in China.
Underlying data revealed a tendency among oil investors toward speculative long positioning. The 30-day volatility of WTI Crude Futures has decreased significantly from its peak on February 22. Commitment of Traders report by the U.S. Commodity Futures Trading Commission showed a clear switch to long Brent oil among money managers since February.
Copper price calmed down on a second day, trading around 2.2720 from its peak above 2.30 last week. A 5.8 percent gains in iron ore provides support to the metals complex and copper will likely aim for further upside. More enhancement could arise by way of China’s new growth plan from the National People’s Congress and Chinese People’s Political Consultative Conference.
Gold price also lowered from its mark of a bullish market at 1279.8. Gold investors will be watching the European Central Bank’s meeting on Thursday with an eye for easing measures or explicit bias. This widely expected intention to stimulate Eurozone growth will no doubt benefit gold as it suffers falling interests after strong US Non-farm Payrolls last week.
GOLD TECHNICAL ANALYSIS – Gold price consistently rose above the 5-day moving average as uptrend signal firmed up. On the downside, 20-day MA and support trend line are unlikely to be challenged in near term. Flat momentum may develop either way depending on whether the outcome of ECB meeting matches with market’s expectation of aggressive easing.
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