Strong U.S. data turned the table overnight to risk-positive with higher ISM manufacturing, construction spending and auto sales. The recovery of US dollar, equities, and oil subsequently pushed gold and safe haven JPY lower.

Gold prices retreated below 1230 with chances of yet lower moves, Asia nearly gave back all of yesterday’s gains. Risk recovery rapidly gathers strength across Asian stock exchanges and AUD while gold fades into the background. Shanghai Composite, Australia ASX and Hang Seng each jumped over 2 percent, with Nikkei up 4.2 percent. U.S. Non-farm Payrolls later this week poses another threat to gold price with jobs gain expected.

Copper and the metals complex traded positive together with equities. Hopes of China stimulus resurfaced in Asia Pacific and likely keep metals up for some time, after a 5-month low Caixin China manufacturing PMI. The government has implemented a number of reforms although mostly financial related, least with an RRR cut this week. Australia fourth-quarter GDP came out a 3 percent strong today, reflecting resilience in commodity-producing economies in the face of low prices.

Oil price is the only commodity experiencing outflows among renewed risk-on positions. Weekly inventory record from American Petroleum Institute showed a large build of 9.9 million barrels, almost threefold the forecasted volume. Oil is trading subdued near a past level at 33.84 and a descent below this would spell trouble for the oil bulls.

GOLD TECHNICAL ANALYSIS – Gold price cooled down for the second session concurrent to a rush into risk assets. Uptrend signal is still unconfirmed, whereas the downside of gold remains limited with support trend line holding firmly underneath. It is well contained in a consolidation range.

Daily Chart – Created Using FXCM Marketscope

COPPER TECHNICAL ANALYSIS – Copper broke 2.1485 resistance level to reach up to trend line today. Although it is not expected to cross above the trend line soon, this effectively thwarts chances of a double top at 2.1485 and ensuing downward reversal. Upward momentum could be a leading indicator for short term traders.