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Gold and Oil Markets Report – 2 July 2012

Commodities turned up sharply on Friday after European leaders reached relief agreement to relax loan conditions to Spain and possible rescue funds to Italy. WTI Crude prices rebound from bottom while the investors’ sentiment also begins to short-cover ahead of Europe’s embargo on Iran from 1 July. Gold prices jumped sharply together with European currencies after reacted to positive fundamentals in bailout plans.

Crude Oil

WTI crude prices drove up on Friday to above 82.00 benchmarks from 77.00 regions. Since the market has failed to test the 75.00 supports, it may begin to consolidate in coming week with short-covering appearing among buyers. While we foresee the immediate support may arise at 79.50 levels, the bulls may charge higher to 88.00 areas in coming week if the optimism of euro bailout extends higher.

Gold

Gold prices reversed up on Friday from 1550.00 areas to 1600.00 regions at end of day. Technically, the trend still threads sideway in the constricted range aforementioned with no breaking into new direction. This week, we expect strong resistance will emerge at 1610.00 – 1615.0 regions and suppress the market down again. Basically, the patterns are prone to gradual weakness after this upward retracement. Abandon your short-view if the trend pierces above 1615.00 levels.

Silver

Silver prices settled at 27.39 for the weekend with strong buying sentiment. From technical outlook, we expect this market will have more bargaining power than Gold prices with 27.00 as support benchmarks in coming week. Market may make few attempts to pierce 28.00 resistances before turning into consolidation again. However, beware of breaking above this resistance in case the buying interest aims at reaching 29.00 targets.

Crude Palm Oil

Crude Palm Oil Futures (FCPO) on Bursa Derivatives closed lower on weekly basis. The September contract closed at 3020 with the market turnover approximately 26,000 contracts. This week, we foresee the trend may continue to climb higher to test 3100 regions before selling pressure emerges. On the other hand, we shall observe the 2940 supports as indicator for new southern trend if it is broken. Fundamentally, we expect general sideways trend and prone to slight bullishness while reacting to Europe financial salvage.

Dar Wong

This post is contributed by OPF Guest Blogger, DAR Wong.

Wong is founder and principal consultant of PWForex.com and holds a professional qualification in NASD series 3 and 5 approved by National Futures Association (USA). He was previously attached with Bankers Trust Futures Inc, Barclays ZW Futures and Smith Barney Shearson (Citigroup) Inc.

He is also an active trader and author of 8 Ways to Invest In China’s Emerging Markets. Wong is also columnist for The Star, The Borneo Post in East Malaysia, The Busy Weekly, The Trader’s Journal, The Forex Journal, The Pulses, The Analysts and Capital Asia magazine.

He is a regular speaker on trading topics as well as Master Speaker for the annual Asia Traders and Investors Convention (ATIC).

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DISCLAIMER: This post is written for general information only. The author, publisher and/or any third party involved in the distribution of this work assume no legal responsibilities and shall have no liability whatsoever for any direct or consequential losses, costs or expenses arising from the use of the information contained herein.

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