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Gold and Oil Markets Report – 16 February 2015

A guest post written by DAR Wong and Chong HC

Gold slid again last week from 1240.00 levels to 1216.00 lows as buyers’ confidence waned. Crude has been trading in whipsaw patterns as short-covering appeared before weekend. The US Dollar Index challenged 95.00 resistances again but settled below this benchmark before weekend, which is seen as essential to lead an inverse trend in most commodity prices in coming week. General outlook for commodity demands are still sluggish after recent slowdown in China’s consumer prices.

Crude Oil

WTI Crude prices climbed from 48.00 bottoms last week and closed at 52.00 regions on Friday. This week, the market may try to challenge the 55.00 – 57.00 resistances before sliding again. Nevertheless, we foresee a probable phenomenon of seeing Gold and Crude prices diverge again if the energies demand contract. The support is seen at 48.00 levels but will become volatile once it is violated. We suggest traders may want to cut down risky positions as Asia will be going through long holiday and weekend this week.

Gold

Gold prices closed at 1227.00 regions on Friday after it challenged to break the 5-week low at 1217.00 levels. Technically, the market has reached a supportive area at 1230.00 regions that may consolidate sideways around here. The trend of US Dollar Index in coming week will definitely play an important role in leading yellow metal. We reckon breaking below 1215.00 immediate supports will unwind the prices to 1200.00 areas. Otherwise, standing firm and escalate above 1235.00 after middle this week will return to 1255.00 as our target.

Silver

Silver prices had a good jump on Friday and closed at 17.347 for weekend. This week, we reckon the market will remain resilient in bullish trend with support rising at 17.150 regions if Gold can start to lead the run up. Technically, the uptrend carries potential to reach up 18.000 targets as long our forecast stays above 17.150 levels. Take note the Gold/Silver ratio has begun to narrow down and soon will trigger an uptrend in these 2 instruments separately.

Crude Palm Oil

Crude Palm Oil Futures (FCPO) on Bursa Malaysia Derivatives closed lower on weekly basis after a rally in prior week. The bear sentiment comes from the concerns on new imposed export duty to be implemented in March. Malaysian government has announced it will not extend zero tax on exports. April contract closed at 2293 as calendar spread continues to narrow down. This week, we may see less volatility due to the coming long Chinese holidays. The market will probably stay within the range from 2250 – 2320 regions.

Dar Wong

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

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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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