The rally of risk assets may prolong throughout this week with the aid from oil gains and high CNY fixing by the PBoC. The central bank today set yuan mid-point not far off yesterday’s half-year low. All Asian equity indices posted gains during the day and bonds retreated.

Oil price continued its impressive winning streak on a second day to almost touch up to $31. This big handle is worth watching as it alternatively acted as support and resistance levels during various days this year. A breach above it would be good indication of further topside development.

After rumor of OPEC’s coordinated cuts on Friday lifted oil and the risk complex, more have been revealed, all positive to oil price. Bloomberg reported that oil ministers from Saudi Arabia and Russia are meeting in Qatar, after a tour by Venezuela’s oil minister around OPEC countries last month.

Gold price nearly gave back all of last week’s gains as investors withdrew from safe haven and move into risk. Macro sentiment and position adjustments are driving gold price in the short term, with more downside expected. A stall in the equity rebound would be a prerequisite for gold to regain its footing.

Copper price is facing a recurring level of 2.0845 at top, similar to oil. A consecutive high CNY fix and a record high new yuan loans in China affirm investors of the government’s intention to keep their market and economy in check. Such is inherently beneficial to metals including copper. On the other hand, industry-wide consolidation continued with Freeport selling its stake in Morenci Mine to Sumitomo.

GOLD TECHNICAL ANALYSIS – This week’s losses nearly pared all gains of gold in the last week. Despite the recent rapid climb, uptrend signal has not emerged in gold’s weekly chart. Hence a slide in price may carry on as sharply as it did on the way up. Investors should prepare for a return to support trend line.