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Gold and Oil Markets Report – 12 Dec 2011

Commodity prices whipsawed last week by reacting to news of European Central Bank (ECB) cut in refi-rate by 25 basis points and comments by its new President Draghi that policymakers will not support stimulus permanently for bailing out Euro debt crisis. The US instruments become favorable assets again for investors with surging dollar that bludgeoned the Crude and Gold prices.

Gold

Gold prices consolidated from 1701.00 – 1756.00 during last week with no breakthrough of trend direction. Technically speaking, the trend outlook favors bearishness and may decline beyond 1700.00 this week. This week, we expect the bears to reach S1 – 1665.00 as our first target while keeping in view of the lower target at S2 – 1725.00 regions. Only reversal to attempt 1750.00 levels might effectively ignite a new bullish engine.  

Silver

Silver prices were consolidating sideway but bias to bearishness last week. The market tested into 31.00 regions as we expected but closed at 32.09 on Friday. This week, we reckon the market will drop into 30.40 levels if commodity prices decline further. Resistance will remain strong at 32.40 regions unless the trend settles above here for a bullish reversal!

Crude Oil

WTI Crude prices traded downward from last week’s high 102.50 to 97.30 but pulled up on Friday due to strong US consumer sentiments. However, we are skeptical if the trend could challenge above 100.00 benchmarks again unless some new disasters arise in Iran conflict with the West. We reckon the market will consolidate from 97.10 – 100.00 until mid-week with possibility of breaking lower to 95.00 supports or beyond. Abandon your short-view if the market re-settles above 100.00 benchmarks!

Crude Palm Oil

Crude Palm Oil Futures (FCPO) on Bursa Malaysia Derivatives was range bound last week from 3063 – 3133 regions. The market was in little movements as commodities remained bearishness amid dollar surged. The most active February month closed at 3084 for the weekend while liquidity thinned in year-end season. This week, we maintain the view of market in range bound from 3000 – 3150 as in previous forecasts. However, the technical outlook still favors bearish outlook! 

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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