Gold

Active buying in Asia continued to buoy market sentiment, and gold is likely to trade in the range between $1,370 and $1,378 with a possibility of breaching the upside, he said.

Spot gold gained 0.4 percent to $1,373.3 an ounce by 0313 GMT, gearing for its third straight day of gains.

U.S. gold futures also rose by 0.4 percent to $1,373.

Spot gold is expected to end its current minor rebound by briefly touching a trendline resistance at $1,378 per ounce, as the major trend is still down, said Wang Tao, a Reuters market analyst.

PLATINUM AT 30-MONTH HIGH

Spot platinum rose to $1,842.5 an ounce, its highest since July 2008, before easing to $1,839.99.

Upbeat economic data from the U.S. and Europe in recent weeks suggests the global economy has gained a steadier footing, boding well for industrial metals as well as precious metals with industrial uses, including silver, platinum and palladium.

Three-month copper on the London Metal Exchange was slightly firmer at $9,720, just $34 below its record high hit earlier in the month.

Platinum is expected to surge to $1,950 per ounce over the next few weeks, should it stand firm above a pivotal resistance at $1,850, as the uptrend is steady and the bullish momentum has not dissipated. Retracement from the current level will be limited to $1,780, said Reuters' Wang.

PGM (platinum group metals) are well-bid today, lending support to gold, said a Singapore-based trader.

Asian stocks rose on Wednesday, taking a cue from Wall Street gains and on hopes for more robust U.S. earnings.

Investors had expected strong earnings from Wall Street, as banks started reporting financial results this week. U.S. stocks gained on Tuesday, despite weak Citigroup earnings.

OIL AT $91

U.S. crude for February delivery rose 17 cents to $91.55 a barrel by 0250 GMT, after settling down 16 cents at $91.38 a barrel on Tuesday. The February contract expires on Thursday.

London Brent was down 5 cents to $97.75 a barrel, after rising 37 cents to settle at $97.80 a barrel. Brent's bounce on Tuesday came after its 92-cent fall on Monday, a U.S. holiday.

Traders will scour U.S. economic data due later in the day for more clues to the state of demand in the world's top energy consumer.

The Commerce Dept will release December housing starts and permits at 1330 GMT, which are expected to be mildly positive. Economists forecast a 550,000 annualized starts rate compared with a 555,000 rate in November. A total of 560,000 permits is expected in December compared with 544,000 in the prior month.

The release of weekly U.S. industry and government oil inventory data this week will be delayed a day following Monday's national holiday.

On the supply front, Alaska's main oil pipeline should restore shipments to its normal rate of 630,000 barrels per day in under a week from around 510,000 bpd, after its recent shutdown due to a leak, the operator said on Tuesday.

The IEA said on Tuesday that OPEC leader Saudi Arabia had stealthily boosted output to cool an oil price rally.

Inflation fear gets the attention in the Commodities sector

Inflation is attracting attention; last week equities and commodities rose, as the EuroZone debt issues faded on successful bond auctions from the EU's small members.

The 4% rise of the Euro vs the UDS, gathered momentum following the ECB's Jean Claude Trichet's tough inflation remarks, seeming to signal the chance of a rate rise earlier than the market may have thought.

EU inflation rose to 2.2% in December, the fastest pace since Y 2008, and is now above the ECB's ceiling of 2%.

Commodities, that had retraced during the 1st week of January, recovered with the Reuters Jeffries CRB index charging North, and almost reaching a 50% percent retracement of the Y's 2008 to 2009 sell off. Strong rallies in Agricultural and Energy products put the index 2.3% higher at Friday's close.

Gold and Silver are working to gain traction again over the last 2 weeks. Lessened concern about the EU's sovereign debt, stock market gains and a shifting focus toward cyclical commodities, such as energy and base metals, have undermined some of the Strong support seen over the last 6 months.

The speculative Long position in both precious metals has seen a continued reduction over the past 3 months while ETF investments have lessened a bit too.

Silver has under-performed Gold by 3% recently, and is now range bound between 28 to 30 oz, and Gold is trading in a range between 1,350 and 1,400. A clear break below either of those 2 lows increases the risk for more position squaring IMO.

Energy prices recovered from the selling during the 1st week of January on the back of various supply considerations.

A report on the Gulf of Mexico leak last year could herald a new, and more costly era for offshore drilling there with some projects being delayed, causing a reduction of supply to the US market.

European Brent Crude looks set to be the 1st to test the 100 bbl mark as it continues to trade at a wide premium over WTI crude.

This week it tapped at 98.85 bbl with the premium over March WTI rising to 6.00 bbl.

Supply disruptions and cold weather in Europe combined with high inventory levels at Cushing, the delivery hub for WTI crude, has caused the widening of the spread.

Some analyst are now saying that the price of Brent Crude Oil is a better reflection of the current Global demand, and threatening WTI Crude's status as the Global benchmark price.

What is clear is that Global demand rose during Q-4 of Y 2010 and projections for growth in Y 2011 point towards a Global increase in demand, and the excess capacity OPEC is in no hurry open the valves, hence OPEC holds the Key on how the price will act in the months ahead.

The 90 bbl level is the pivot point for WTI Crude with the recent highs at 92.60 marking resistance, and the support is at the December and January lows; 87.10 bbl.

The Overall Technical Outlook

Comex Gold (GC)

Gold's recovery from 1352.7 finished at 1392.9, and then fell sharply after failing to hold above 4 hours 55 EMA.

This action suggests that the fall from 1424.4 is resuming, and the initial bias is to the Southside this week and a clear break of 1352.7, Key support, will confirm this Bearish sentiment and target 1329, Key support, for confirming a medium term reversal.

On the Upside: a clear above 1392.9 will turn the bias back to the Northside for a move to 1424.4 and higher IMO.

The Big Picture: the rise from 1155.6 is treated as the 5th wave of the 5 wave sequence from 1044.5, which should also be 5th wave of the rally from 681, the Y 2008 low.

Note: Again, Gold is close to 2 important projection targets, 161.8% projection of 931.3 to 1227.5 from 1044.5 at 1449.6 and 100% projection of 253 to 1033.9 from 681 at 1462.

A clear break of 1329, Key support, signals that 1424.3 is an important Top, and Gold should have started a medium term correction that may dip back into 1044.5/1227.5 support Zone on the move.

The Long Term Picture: the rise from 681 is treated as resumption of the long term up-trend from the Y 1999 low of 253. 100% projection of 253 to 1033.9 from 681 at 1462 is close to being hit, and a correction is likely on he horizon. But, even in case of deep fall, 55 months EMA, now at 964.3, should present Strong support to contain the downside and bring on the resumption of the up-trend. Stay tuned...