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Gold and Oil Markets Report – 8 April 2012

A guest post written by DAR Wong

The US non-farm payroll grew at only 88,000 in March and dampened confidence of investors. Weekly jobless claims rose to 4-months high by rising to 385,000 filings for the week ended 31 March. On Thursday, Japan announced new stimulus of monthly injection JPY7 Trillion (USD72 Billion) in bonds purchase program. Both European Central Bank (ECB) and Bank of England (BOE) remain unchanged in interest rates but committed to existing measures to support the ailing economies. Market interprets humongous monetary floodgates will be opened in coming months by the 4 major central banks namely the US FED, BOJ, ECB and BOE.

Crude Oil

WTI Crude prices fell heavily from near to 98.00 highs but stood well at 92.00 regions as firm supports. Oil prices have been hammered from slowdown in the US economy but the lower than expected payroll data put a strong selling pressure in liquidation on Friday. This week, we reckon technical consolidation will emerge and trend may probably trade from 92.00 – 95.50 ranges. Abandon your long-view should the bears engulf beneath 92.00 supports.

Gold

Gold prices plummeted as we predicted last week. The market plunged from 1603.00 regions to 1539.00 levels before settling at 1580.00 on Friday. This week, we reckon the yellow metal will stay in weak demands with resistance emerging at 1585.00 – 1590.00 areas. In our opinion, Gold will soon become irrational again in market correlation to USDX as Yen recedes too rapidly. Beware of Dollar weakening against Euro to counter balance the Yen but this may not push up the Gold prices.

Silver

Silver prices reversed up on Friday following the Gold trend and closed at 27.340 levels. Judging from Gold/Silver ratio, the spread is rather high at 58.00 regions with strong resistance gradually emerging. This week, we expect the Silver trend to rise faster than Gold in order to narrow the ratio gap. Technically, we have spotted the resistances to be lying at R1 – 27.500 and R2 – 28.000 regions before decline may entail. Going below 26.700 levels will resume bearish trend.

Crude Palm Oil

Crude Palm Oil Futures (FCPO) on Bursa Malaysia Derivatives continues to trade weaker due to the correlated selling pressure in Crude Oil and Soybean Oil markets. The June contract closed at 2356 with approximately 23,500 contracts. This week, we reckon the trend will sit tight at 2330 supports while crossing the first resistance 2410 may climb higher to 2500 regions. Abandon your long-view if the bears plunge below 2330 supports.

Dar Wong

This post is contributed by OPF Guest Blogger, DAR Wong.

Wong is the founder and Principal Consultant of PWForex.com and holds a professional qualification in NASD series 3 and 5 approved by National Futures Association (USA).

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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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