News Column

KASB Securities Limited and Economics Research - Commodities Corner

May 21, 2014

Gold holds ground ahead of FOMC minutes

- Gold range-bound ahead of FOMC meeting minutes: Gold prices ended the US day session slightly higher but near the daily high on Tuesday. Some risk-aversion in the market place limited the selling pressure in the safe-haven metal.

The US stock indices were solidly lower, suggesting some nervousness in the market place. Traders are awaiting Wednesday release of the minutes from the latest Federal Reserve Open Market Committee (FOMC) meeting.

- WTI trades higher on renewed Libyan tensions: WTI continues to trade near a four week high on renewed concerns over Libya's oil output and following some of the worst violence in Tripoli since the 2011 war against Muammar Gaddafi. In other news, Ukraine conflict continues to provide support to prices as US President Barrack Obama and French President Francois Hollande discussed further sanctions on Russia if it continues provocative and destabilizing behaviour.

Time Currency Impact Event Forecast Previous

21st May 2014 Wednesday

7:00pm USD Medium FOMC Member Dudley Speaks - -

7:30pm USD Medium Crude Oil Inventories -0.1M -0.9M

8:30pm USD Medium Fed Chair Yellen Speaks - -

10:30pm USD Medium FOMC Member Kocher Speaks - -

11:00pm USD High FOMC Meeting Minutes - -

22nd May 2014 Thursday

7:00pm USD High Unemployment Claims 312K 297K

7:30pm USD Medium Flash Manufacturing PMI 55.6 55.4

8:30pm USD High Existing Home Sales 4.71M 4.59M

Gold Spot

Technical Strategy: Sell on Strength

Gold closed at US$1,294, below the 50% retracement level of US$1,268-US$1,331 which is at US$1,300. RSI and Stochastic are bearish and suggest lower prices in the near term. KASB Securities Limited recommends selling on strength below US$1,300 targeting US$1,288 with stops above US$1,307 (61.8% retracement of US$1,268-US$1,331).

Silver Spot

Technical Strategy: Play the range

Silver closed at US$19.38, above the 38.2% retracement of US$18.55-US$20.37 which is at US$19.24. However, RSI and Stochastic are bearish and suggest lower prices in the near term. KASB Securities Limited recommends playing the range of US$19.24-US$19.66 (Weekly High). A break below US$19.24 can target US$19.02 (Last week's low); while a break above US$19.66 can target US$19.84 (50 - DMA).

WTI Spot (Crude Oil)

Technical Strategy: Sell on Strength

Oil closed at US$102.95, below the 76.4% retracement of US$98.73 - US$104.96 which is at US$103.50. A test of US$101.86 (30 - DMA) is likely. KASB Securities Limited recommends selling on strength below US$103.50 targeting US$101.86 with stops above US$104.32.

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Source: Pakistan Press International