Metals

The bullion retreated back to near 1,260 levels on Friday morning, as the metal failed to break through the resistance cluster, which it faced on Thursday. Although, the outlook looked bright for the yellow metal on Thursday morning, the metal failed to break through the weekly R2 and monthly S2 near 1,273. Afterwards, even the 200-day SMA failed to support the bullion, which fell and continued the fall on Friday morning to reach the support provided by the weekly R1 at 1,261.62. However, it is still possible at large that the metal will continue to fall during the rest of the day.

The Singapore Bullion Market Association (SBMA) announced the launch of a joint feasibility study between the SBMA, LBMA and ICE Benchmark Administration (IBA). The study will focus on customers’ needs for a LBMA Pre-AM Gold Price at 14:00 Singapore Time (06:00 GMT), Lim Hng Kiang, minister for trade and industry and deputy chairman of the Monetary Authority of Singapore, told an industry conference on Monday.

"We hope to make a reputable gold benchmark mechanism in London available to Asian users," SBMA’s chief executive, Albert Cheng, told Reuters. Cheng said a feasibility study is being carried out, and "if there’s enough interest, the IBA will consider launching it early next year."
This initiative is supported by International Enterprise (IE) Singapore, the government agency driving international trade.

Russia has no plan to change its current level of oil output, said Russian Energy Minister Alexander Novak, albeit he applauds OPEC oil cartel’s agreement to curb production.

"Russia will carefully consider those proposals which will be eventually drawn up. … But our position is keeping the volume of production at the level that has been reached. These are the main principles that were earlier being considered,” said Novak. The comments came after OPEC reached a preliminary deal Wednesday on the sidelines of the International Energy Forum to cut current production to 32.5 – 33.0 million barrel per day (bpd), for the first time since 2008.

The bullion bounced off the rising wedge pattern’s lower trend line and surged on Thursday morning. On early morning, the metal was about to face a resistance cluster from 1,326 to 1,331, which is comprised of both the weekly and monthly pivot points and the 20 and 55-day simple moving averages. Previously, it was possible that the yellow metal will break out from the rising wedge pattern due to the pressure provided by a triangle pattern, and the threat still remains, as the triangle remains active.

The yellow metal continued to try and break the resistance put up by the weekly pivot point at 1,316.02 on Wednesday morning. Although, the metal had reached far above the resistance and touched the 1,320 mark, it retreated afterwards, as the 20-day SMA is approaching at 1,322.16, and it is set to provide additional resistance against the bullion’s surge. Daily aggregate technical indicators forecast a fall of the metal by the end of the day’s trading session, and the closest support level is at 1,305.52. Both of these factors indicate, that the rising wedge pattern of the metal might be soon broken.

China is creating the second largest steel group in the world.
According to Chinese media, it could be announced in the week the takeover by Baosteel Group, government-company, China’s second giant of the sector, which would incorporate Wuhan Iron and Steel Group. The two companies are currently in fourth and eleventh place in the world ranking of steel producers and, according to figures by the World Steel Association, combined annual capacity of the two companies in 2015 was around to 60.7 million tons, behind only to Luxembourg-based ArcelorMittal.

Glencore seems to have overcome the worst, in the words of CEO Ivan Glasenberg, when presenting the first-half figures. The Baar-based company has almost halved its losses in the first six months of the year, rising to 369 million dollars from 676 million a year earlier, while revenue fell by 6% to 69.4 billion. Particularly the positive performance of the trading division, which increased earnings by 1.2% to 1.2 billion. According Glasenberg annual profits will rise further to 2.4 – to $ 2.7 billion due to diversification, given that the weakness in oil trading was offset by the strengthening in metals.

The yellow metal stopped the fluctuations around the 1,340 level, in which it had been in for the past weeks, as the metal fell on Wednesday due to being pressured by the 20-day SMA from the downside. In the fall the bullion almost reached the weekly S2 at 1,322.63 and ended the session at 1,326.32. On Thursday morning gold has rebounded against the weekly support level and slightly surged, as it has encountered the 55-day SMA at 1,327.31. As the metal is pressured between the two levels, it is most likely going to remain unchanged during today’s trading session.