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Gold and Oil Markets Report – 24 September 2012

Last week, the slowdown in China’s manufacturing and decline in Japan’s exports put a lid in crude oil prices. The US oil inventory surged 8.5 million barrels in the week ended September 22 as production in Gulf of Mexico resume after Storm Issac halted. Gold prices traded at post-stimulus high at 1787.50 over 2 weeks’ market but subjected to profit-taking at closing for the weekend.

Crude Oil

WTI Crude prices fell to 90.97 last week unexpectedly especially after Wednesday when China and Japan released their weak data. This week, we reckon the trend will trade from 91.00 – 96.00 while demands will shrink in line with technical correction from the recent top 100.43 levels. Technically, we expect the trend to be fairly mild in coming few weeks as the effects of market stimulus will gradually be waned.

Gold

Gold prices short squeezed on Friday to 1787.50 levels before it settled on the low-ends at 1772.00 regions. Technically, the market is very prone to correction in coming weeks due to profit-taking as buyers may close books for the month of September. We expect the trend to be softening this week as the bears will aim at the supports sitting at S1 – 1750.00 and S2 – 1725.00. Abandon your short-view if the trend reverses above 1788.00 again!

Silver

Silver prices created a new 6-month high at 35.187 on Friday but closed in weak sentiment at 34.499. In our opinion, this week will be crucial to the beginning of price correction once the market closes below 34.330. Short-traders are to adopt new entry in early week while we target to reach down at 32.50 areas towards coming weekend. Abandon your short-view if the bulls pierce above 34.500 resistances.

Crude Palm Oil

Crude Palm Oil Futures (FCPO) on Bursa Derivatives was down last week due to the plunged in Crude prices. Palm’s discount to soybean oil widens as Malaysia’s Palm oil inventories climbed. The tropical oil reached its lowest price levels at 2755 since October 2010. On Friday, the December contract closed at 2762 in weak sentiment. This week, we suspect the bears may test 2700 supports before turning up into correction at 2850 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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