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Gold and Oil Markets Report – 04 June 2012

Crude oil prices plunged last week while Gold recovered on Friday. Energies demands were weakened mainly due to slowdown declared in US and China economies while the Euro debt rout caused worrisome concerns of global financial meltdowns. Gold prices jumped higher on hedging against defunct currencies and sell off in dollar after Friday’s weak job data. The US non-farm payroll for May grew only 69,000 at half of the median forecast and housing slump persists in pessimism.

Crude Oil

WTI Crude prices were supported above 89.00 levels in early last week as we forecast. After Wednesday, the oil prices drove through the aforementioned support after China released slowdown in manufacturing index. The market closed almost near to intra-week’s low on Friday at 83.21. Moving forward, we expect the market to consolidate from 82.00 – 88.00 regions while it stabilizes in technical digestion. However, abandon your long-view if the market penetrates beneath 82.00 levels.

Gold

Gold prices closed above 1550.00 supports on daily settlement last week though it tested 1531.00 low on Wednesday. The market closed at 1622.00 regions on Friday after a big jump of more than USD70 range. We believe the market will stay firm above 1590.00 supports for this coming week while the topside targets at 1640.00 levels. In overall, the trend is expected to trade at the topside now from S1 – 1600.00 to R1 – 1640.00. Abandon your reversal view from the top if the market pierces through 1640.00 resistances.

Silver

Silver has shown strong support at 27.60 levels last week. The market is expected to regain strength in coming week to 30.50 regions while the Gold/Silver ratio reaches double-top at 57.00 levels. As the spread ratio decreases, we expect the Silver prices to ascend faster than Gold should the two precious metals rise. Abandon your long-view in Silver if it breaks beneath 27.60 supports.

Crude Palm Oil

Crude Palm Oil Futures (FCPO) on Bursa Derivatives continued to in weakness on Friday following plunge in Crude oil amid Eurozone debt worries. The August delivery month settled at 3006 in inverted “V” formation with supports seen at 2960 regions. We reckon buying interest will begin to emerge this week while recovery may soon climb to 3120 regions. However, beware of continual fundamental weakness that may drive beneath 2960 and reach lower at 2900 before the technical rebound rises.

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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