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Gold and Oil Markets Report – 20 August 2012

Gold and Crude prices were bullish last week due to strong recovery signs in US construction, consumer confidence and leading indicators outlook for the coming two quarters. The National Association of Home Builders/Wells Fargo builder confidence index released its best report in 5 years by showing gain to 37 index reading while building permit gained by 812,000 annual rates in July, the best record in past 4 years.

Crude Oil

The WTI crude prices broke our 94.70 resistances and traded above the EMA200 line for 3 days till weekend closing. Moving forward, we reckon the continual uptrend for coming week may attempt 99.00 levels before the bulls face exhaustion. However, beware of the trend may fall before it reaches this topside target in case negative news arises in shrinking demands from Eurozone and China again. Once the uptrend completes and begins to drawdown, we expect the bears to take the prices down to 93.50 supports.

Gold

Gold prices reversed up after middle last week upon reacting to US recovering data. The market closed at 1615.00 regions for the weekend with limitations capped at 1622.00 resistances. This week, the trend has to advance above this benchmark in order to resume bullish sentiment to 1640.00 regions. Otherwise, the technical outlook could turn into weakness again once it sinks beneath 1600.00 supports and head down to 1560.00 areas as predicted last week.

Silver

Silver prices have been channeling into tight consolidation for weeks inside the range from 87.50 – 28.50 regions. We reckon the trend will turn bullish anytime once it steps above 28.50 resistances though 29.00 levels may be another strong selling area. This week, Silver prices may take a dip to 27.00 levels again in wake of bargain hunting if Gold sinks beneath 1600.00 again!

Crude Palm Oil

Crude Palm Oil Futures (FCPO) on Bursa Malaysia Derivatives tested our support at 2840 levels mentioned last week and rebound as we expected. The market reached 2820 and jumped higher to close at 2962 in November delivery month. This week, we foresee the market will thin down in activity due to long holiday season. We target the topside trend to be capped at 3030 areas while the uptrend could be losing steam soon. On turning down, the bears might test 2900 supports again once the top retracement is accomplished.

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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