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Gold and Oil Markets Report – 7 Jan 2013

The US leaders succeed in budget talks and avert the auto-increase in citizens’ tax and spending cuts amounting USD600 billion. Stocks have been rising globally from short-lived booster while investors are worried of delay eruption in economic slowdown. Gold prices decline after US FED policymakers said they will end the asset purchase program of monthly USD85 billion sometime in 2013. Crude rising prices are capped after the US Energy Department reported gasoline and distillate fuel supplies jumped a combined 7.14 million barrels in the week ended 29 December.

Crude Oil

WTI Crude prices have been trading above the EMA200 support at 91.40 levels but capped at 94.00 resistances. This week, breaking below 91.50 supports may initiate new selling sentiment while surging above the 94.00 resistances could be triggered by weaker dollar. However, we are prone to draw down correction since the technical outlook suggests profit-taking at the 94.00 regions. Abandon your short-view should the trend pierces above 94.00 levels.

Gold

Gold prices dipped from 1694.00 highs to 1625.00 regions last week and closed at 1655.00 areas on Friday. This week, we expect the immediate resistance to emerge at 1670.00 levels while market may slow down into consolidation. Bargain-hunting will arise at 1640.00 regions due to triple support formation on day-chart appearance. Trade cautiously as both trend to reach 1600.00 and 1700.00 are possible due to uncertainty in dollar strength.

Silver

Silver prices recoiled on Friday from the 29.235 bottoms and closed at 30.208 for the weekend. This week, we foresee the market will consolidate and buying interest will emerge at 29.50 regions. The trend will probably ascend to R1 – 30.40 and R2 – 30.80 as our two correction targets. Gold/Silver ratio is likely to trade from 54.50 – 55.00 with prone bias to firm sentiment.

Crude Palm Oil

Crude Palm Oil Futures (FCPO) on Bursa Derivatives eased on profit-taking activity with March delivery contract settled at 2467. Market turnover recorded at approximately 32000 contracts on Friday. This week, we foresee the market will remain sideways with the support maintaining at 2400 levels while the upside resistance caps at 2600 areas.

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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