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Gold and Oil Markets Report – 17 Dec 2012

The WTI Crude prices recovered on Friday following an increased manufacturing in China. The HSBC Holdings Plc reported its China’s purchasing manager index at 50.9 in December and higher than prior month. The U.S. FOMC statement released on last Thursday said policymakers will ensure the continuity of USD45 billion monthly stimuli in purchasing housing debts from January onwards. Unfortunately, Gold prices plunged below 1700.00 benchmarks despite weaker dollar has managed to support higher crude demands.

Crude Oil

WTI Crude prices bounced off from 85.21 grounds and crawled slowly inversely to weaker dollar last week. We reckon the market may bottom out soon as long as the trend does not penetrate below 85.00 supports. As tension rises in Syria and Egypt separately, the market may begin to strengthen from lesser supply in coming weeks. Moving forward, we expect the trend will move from 85.00 – 89.00 ranges amid gradual consolidation.

Gold

Gold prices fell off 1723.00 regions after the FOMC meeting released its statement of new stimulus in January. Basically, investors are still wary of January’s fiscal cliff as President Obama has not reached an agreement with the Republican’s speaker in budget talk. This week, we foresee the market may trade tightly from 1685.00 – 1705.00 ranges as bargain-hunting will rise at 1680.00 levels. It will take more effort for U.S. policymakers to hammer the dollar value in order to lift the yellow metal back to above 1720.00 levels which could only realize in early January.

Silver

Silver prices have been more bearish due to stronger spread price traded in Gold/Silver ratio. The Silver slid from 33.795 tops as we predicted last week. This week, we expect the market might continue to test lower grounds while aiming at S1 – 32.000 and S2 – 31.500 levels. The topside resistance has emerged at 33.00 regions with selling pressures for liquidating long trades. Observe the Gold/Silver ratio above 53.000 levels that may push Silver prices to S2 levels mentioned.

Crude Palm Oil

Crude Palm Oil Futures (FCPO) on Bursa Derivatives continues its weakening trend amid increasing supplies and liquidating fear in market among hedge traders. Persistent global contraction and worries in European demands put lids on the commodity prices. February contract closed at 2276 with approximately 44,000 contracts on Friday. The week, we reckon the market will trade marginally lower at 2200 regions before rebounding higher to above 2300 levels. Breaking below 2180 could indicate lower potential at 2150 targets.

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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