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Gold and Oil Markets Report – 26 October 2015

A guest post written by DAR Wong and Chong HC

Gold traded in corrective trend last week and was pressed down again on Friday as fund flight into equity markets. China cut interest rates before weekend and bludgeoned Gold prices inversely to higher Dollar index. However, Crude prices edged higher after China cut 25 basis points in borrowing rates to 4.2 percent as traders expect cheaper Yuan will boost stronger demand in energy instruments. Following the news, U.S. Dollar index reversed up from 94.00 low regions to above 97.00 levels in resilient demand on Friday.

Crude Oil

WTI Crude prices traded in narrow range but prone to weak demand last week. Market has been non-volatile but disappointed long traders as the trend falls back. Moving forward, we still reckon the support will emerge strong at 44.00 areas which very near to where it closed on last Friday. Since we have no clue to the directional trend of Crude prices, preference is set to the tight range of 44.00 – 46.00 levels for observing breakout to new direction. In addition, we observe the Crude prices may begin to be correlated to Chinese Yuan since China is the world’s largest energy consumer.

Gold

Gold prices have been hovering around EMA200 line in day-chart while making consolidation. This week, we reckon the support will emerge at 1155.00 regions and probably resurge at 1185.00 levels. However, breaking below 1150.0 benchmarks is a negative sign for bullish trend and might head down to re-test 1130.00 bottoms. Technically, we reckon the Dollar index will be very important instrument to study in coming week for determining the inverse relationship to precious metals.

Silver

Silver prices have been hovering sideways for more than 2 weeks around EMA200 on day-chart. Month-chart and week-chart are both signaling bullish trend starting from now with new momentum building up. Technically, we foresee the support will sit at 15.600 areas and likely will lift the demand higher to 16.200 targets. In summary, we believe Silver is beginning to go higher from now onwards and faster than Gold prices when precious metals ascend.

Crude Palm Oil

Crude Palm Oil Futures (FCPO) on Bursa Malaysia Derivatives traded sideways in uncertainty last week. Market opened gapped down on last Friday and moved in narrow range as open interest declined sharply. January contract settled at 2326 after it plunged from 2386 intra-week high. This week, we predict the market will trade in lower prices amid mixed sentiment from 2270 to 2380 ranges. Picking short trades from pull-up retracement is better to be protected with risk control for planning for a good ride downwards.

Dar Wong

This post is contributed by OPF Guest Bloggers, DAR Wong and Chong HC

DAR Wong and Chong HC are the market strategists in APSRI on CPO markets. DAR has 26 years of trading and hedging experiences while HC trades for 7 years and now coaches institutional customers. They can be reached at www.traderpromaster.com

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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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