The industry-funded American Petroleum Institute released inventory data to subscribers at 8:30 am (Sydney) showing a large build in crude. That instantly pushed oil price down below $31 where it may linger for the rest of today. Although stocks at Cushing fell by 660,000 barrels, total U.S. crude inventories surged 11.4 million barrels last week thus worsen the global glut. This spread to some risk assets and tamper with the on-going global risk rally.

Following the oil slip, lower than expected China’s December Industrial Profits accentuated economic doubts and dragged stocks, commodities lower. Oil likely trades under pressure until official data by U.S. Department of Energy tomorrow.

Gold price sustains this week’s 2.3 percent gain in anticipation of no change at U.S. Federal Reserve’s meeting on January 27. No press conference is scheduled for this meeting and it is not expected to deliver interest rate decision. However market speculations are ripe over what message the FOMC may send out regarding rate path this year and possibility of action at the March meeting. Accordingly, knee-jerk reactions and downside risk may emerge in gold.

Copper price traded resiliently above 2.0350 in Asia in spite of an oil slump and a third day of losses in Shanghai Composite index. Any break below this support and especially the 2.0200 critical level may signal an end to this week’s metal rally. Yesterday, copper and zinc topped their four day winning streak after strong imports data from China. Buyers in the country took advantage of low prices to import the most refined copper since 2008.

GOLD TECHNICAL ANALYSIS – The gold rally renewed on anticipation of no change at this month’s Fed meeting. Price surged past the top of early 2016’s rally at 1113. This level will continue to be a pivot to higher extensions or alternatively a retreat due to profit-taking. The bulls should keep stops near this or 20-day moving average and support level at 1092.1.