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Gold and Oil Markets Report – 25 June 2012

Last week, the outcome of US Federal Open Market Committee (FOMC) meeting drove the commodity markets downward after policymakers announced the swap of short-term credit to long-term debt with USD267 billion. Further contraction in Eurozone and China put the bears into global markets in tandem with worsening debt crisis. The Moody’s agency downgraded the credit ratings of 15 financial institutions after Thursday market closed which sank Asia equities on Friday.

Crude Oil

WTI crude prices reached 77.56 low last week on general market weakness of demands from major economies. Market broke below 80.00 benchmarks in past 12-months record citing demands contracting from China’s manufacturing. This week, we expect the market to be resisted at 82.50 resistances while the bears may travel southward to test 75.00 regions. In our opinion, bargain hunting will emerge at 75.00 levels due to past major supports over last 2 years. In summary, picking short entry in early week may be favorable for short-term traders.

Gold

Gold prices turned weak after Bernanke disappointed the market with no stimulus injection to support the commodities. The trend reverses below 1600.00 benchmarks and hovered at 1560.00 levels until Friday’s close. This week, we reckon the market may continue to sink lower while resisted at 1600.00 levels. However, this is still inside our targeted consolidation unless the bears break beneath 1540.00 towards a new southern journey.

Silver

Silver prices have turned into a downtrend after it broke beneath 28.00 supports last week. Moving forward, it is very crucial to follow the trend as the resistance spotted at 27.30 must be guarded well. Otherwise, we expect the trend may drive lower to 26.00 supports. Nevertheless, beware of stronger bears from market fundamentals that may drive the prices down to 25.00 benchmarks.

Crude Palm Oil

Crude Palm Oil Futures (FCPO) on Bursa Derivatives consolidated and closed at 2953 on Friday for September contract. Bear trends entered into commodity markets last week due to Euro contraction and after Bernanke’s decision on halting stimulus injection to support economic expansion. This week, we reckon the market trend will continue sideways but prone to weakness with support resting at 2850 levels. The upside resistance remains at 3050 levels.

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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