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Gold and Oil Markets Report – 14 May 2012

The US dollar index rose last week and punted down on oil and gold prices. Iraq says it will double the oil production output by 2015 and this will overtake the Iran as OPEC’s second largest producer at end of this year. This adds pressure to lower oil prices and Gold has been liquidated in international markets after Europe returns in debt crisis tension.

Crude Oil

WTI Crude prices came off to 95.50 regions as we forecast last week in weak technical trend. The market may face some short-covering in coming early week but resistance has shifted lower to 98.00 levels. While the market may swing between 95.00 – 98.00 ranges in some consolidation, we shall open our next lower target at 92.50 regions should the bears take control after mid week.

Gold

Gold prices have been reduced to 1570.00 regions as suggested last week. Moving forward, we reckon the market sentiment will remain weak with new resistance forming at 1600.00 levels. This week, we foresee the support will emerge at 1570.00 levels and trade sideways up to 1600.00 areas. However, breaking beneath 1570.00 supports could lead another new selling factor in market and drive the bears down to 1530.00 regions!

Silver

Silver prices lowered to 28.50 regions as we predicted previously. The market has slowed down its selling sentiment due to bargain-hunting emerges. This week, we foresee additional small room will open to 28.00 regions and good opportunity to pick long entry from this bottom area. The resistance lies at 29.50 levels that need to be cleared should we see the trend reversing up.

Crude Palm Oil

Crude Palm Oil Futures (FCPO) on Bursa Derivatives continues close lower on Friday following low demands in Crude Oil and Soybean. Persistent worries in Eurozone debts added to the bearish sentiment. The July delivery contract closed at 3275 on Friday with overall market turnover more than 30,000 contracts. This week, we reckon the trading range will move from RM3200 to RM3400. However, there is a strong support at 3240 regions while topside room may re-test 3400 zones if the technical consolidation emerges.

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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