levels and came under profit taking towards the end. As the trend is still strong, we can say that any dip will be an
opportunity to buy with a medium-term view. As per RSI oscillator, we can say that the market may enter into trending
mode.
For the day, the level 5200 may act as a major support and on the higher side 5285 may act as a major resistance for
the market. We are expecting the market to trade between these levels before heading for newer level.
An ideal bearish harmonic Gartley pattern has been caught on the four-hour chart with AB retracement of 61.8% from XA leg. Thus; we believe that the metal might move downwards over intraday basis, supported by the bearish candlesticks formation and the negative signs appearing on RSI and AROON indicators.
Yesterday's expected bullishness has been stopped around 1133.00 zones, where the metal faced the upper line of the descending channel. The mixture between this classical resistance levels and the suggested harmonic structure' Butterfly pattern' of the weekly chart, which is explained in details in our weekly report- is expected to make a negative pressure. Therefore, potential bearish actions could be seen over intraday basis.
Gold price soared to 1133.9 earlier on the day but profit-taking activities pushed price lower. The benchmark contract closed at 1124.2, +0.15%. Others in the precious metal complex also rose with silver gaining +0.975, platinum +0.3%. Palladium was the best performer yesterday with price surging to a new decade-high at 482.9 (today's high: 483) before closing at 478.85, up +1.4%.
Commodities pull back across the board, starting to factor in concerns over China's tightening.
The US Energy Department's report showed that crude inventory rose +1.01 mmb to 334 mmb in the week ended March 12. Although this indicates the 7th consecutive weekly increase, the pace moderated from mid-February to early March. Stockpile at Cushing, where WTI crude is stored, dropped -0.68 mmb.
While utilization rate remained at 81%, both gasoline and distillate stockpiles drew more than expected although due to different reasons. Gasoline stockpile dipped -1.71 mmb as decline in imports (-24%), was bigger than increase in production (+2.3%) and slide in demand (-1.59%). Although demand dropped, the number of days covered fell to 25 days, or +5% above 5-year average.
Distillate inventory extended the decline for a 9th week, by -149 mmb, to 148.1 mmb as led by +3.2% increase in consumption which was partly offset by higher imports (+25%) and production (+3.7%).
Oil bulls were also thrilled by OPEC's announcement to keep production limit unchanged at 24.845M bpd. While this decision had been widely expected, oil ministers' comments that they were happy with price and demand sent the market a positive signal. A few months ago, it was assumed that the internal price range and members seemed to be content with it. It appears that the new range has been shifted up to 80-90.
Algerian oil minister said after the meeting that demand will increase in the third and fourth quarter of the year. Moreover, as global economy continues to improve and Iranian nuclear tensions escalate, oil price should remain firm.
The compliance issue was downplayed although many members produced in excess of their assigned quotas over the past few months. If the OPEC does not worry much about compliance, it may imply that it's confident that growth in demand is capable of absorbing the extra outputs.
Looking at the macro environment, US PPI contracted more than expected, by -0.6% m/m, in February (consensus: -0.2%) following a rise of +1.4% in the previous month. On annual basis, the reading rose +4.4% (consensus: +5.1%). Core inflation was inline with expectation. Annual and monthly readings were +1% and +0.1%, respectively.
Despite the disappointment, risk appetite remains strong as central banks (the Fed, the BOJ and the BOE) pledged to continue accommodative monetary policies. Stock markets rallied with both of DJIA and S&P surging to 17-month highs. European stocks also jumped to the highest level in 17 months on optimism.
The dispute between China and the US about loosening China's exchange rate policy has spurred interests of 2 more parties, the World Bank and the IMF. The World Bank urged China to increase flexibility of Yuan while the IMF said the currency is undervalued The World Bank also suggested China to raise interest rates to contain bubbles
