Gold and Oil Markets Report – 1 September 2014
The Ukraine-Russia tension rises in heat after British government claimed Russia troops have entered into Eastern Ukraine. The US President Obama condemns the incursion but will not counter by military actions. NATO has planned to impose more sanction against Russia economy as form of punishment. Russia President Putin repels the aggression and warns their nuclear power. Surprisingly, American stocks remained firm last week while commodity prices still lied low. European Central Bank (ECB) President Draghi signals of more stimuli if economic situation deteriorates.
WTI Crude prices escalated last week while closed at 95.90 levels on Friday. On Wednesday, the weekly crude inventories were down 2.1 million barrels against positive 1.1 million barrels forecast. Demand drive up the market prices in addition to tension in Ukraine-Russia military rupture. Technically, we predict the trend will be resisted at 98.50 if the bulls continue to march higher this week. Staying above 94.50 levels after coming mid week will confirm the technical recovery in crude prices while sinking below this level may signal further decline to 92.00 benchmarks.
Gold prices traded from 1270.00 – 1295.00 ranges but failed to climb above 1300.00 benchmarks. In our opinion, staying sluggish below 1300.00 levels may easily resume into weakness and fall again in near future. Upon dropping, the market will be challenging first support at 1270.00 and if break below here, could sink to next lower level at 1250.00 levels. Technically, the demand needs to clear above 1300.00 benchmarks before we could pre-empt the next up run will recover at 1320.00 levels.
Silver prices have been capped below 20.000 benchmarks. This week, the market might continue to be bearish if it could not conquer and close above 19.700 levels. Technically, we foresee the uptrend will be resisted at R1 – 19.700 and R2 – 20.300 levels in case of recovery. However, breaking below 19.300 supports could indicate a downtrend back to 18.700 regions! Silver is gradually contracting in daily range as the demand slows down in yellow metal. Continue to observe the Gold trend in leading the Silver direction.
Crude Palm Oil
Crude Palm Oil Futures (FCPO) on Bursa Malaysia Derivatives hit a record low in almost 5 years. The bearish outlook overshadows market sentiment and has diminished buying interest. November contract closed 1930 levels. This week, market trend will still behave weak with selling pressure emerges from 2030 regions in case of pull up. Downside support may appear at 1900 levels but the plunge may test lower at 1850 bottoms before bargain-hunting emerges.
This post is contributed by OPF Guest Bloggers, DAR Wong and Chong HC
DAR Wong and Chong HC are the market strategists in APSRI on CPO markets. DAR has 24 years of trading and hedging experiences while HC trades for 6 years and now coaches institutional customers. They can be reached at www.traderpromaster.com
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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