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Gold and Oil Markets Report – 21 Jan 2013

The crude prices surged on Friday after China, second largest crude consumer, announced its GDP rose 7.9 percent in the Q4 from a year earlier. On the other hand, the world’s largest exporter – Saudi Arabia has reduced production from its highest output in 30 years and inventories in developed economies are contracting after accumulating in much of 2012. On weekly basis, Gold prices closed higher due to receding dollar strength.

Crude Oil

WTI Crude prices soared last week to above 96.00 as we expected. Market closed at 95.65 on Friday due to profit-taking. This week, we reckon the market will continue to climb higher to 98.00 areas. Support rests at 92.70 levels with large buying interest if draw down occurs. Keep watching Middle East progress in political changes that may affect oil trend in coming weeks.

Gold

Gold prices are supported above EMA200 line at 16770.00 while selling pressure emerges strongly at 1700.00. This week, we reckon fundamental factors will lead the market trend in either direction once the aforementioned levels are broken. Trader will face tough decision because the outcome of BOJ meeting on Tuesday will affect the dollar strength which will in return influence Gold prices.

Silver

Silver prices have been bullish last week and closed at 31.850 on Friday. In our opinion, the market will reply on Japan’s stimulus decision this week to coerce another buying spree to 32.500 regions. Otherwise, moving back to 31.000 supports is possible if the trend begins to correct. Technically, we prefer to pick bottom upon draw down of prices.

Crude Palm Oil

Crude Palm Oil Futures (FCPO) on Bursa Derivatives consolidates in range trading below 2450 resistances. The uncertain price trend of soybean oil actually pulled down the FCPO prices last week as the active month passed over to April delivery on 16th April. Market settled at 2399 on Friday on slight short-covering. This week, we foresee the market will still trade in range inside 2300 to 2450 areas.

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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