News Column

KASB Securities Limited and Economics Research - Commodities Corner

May 30, 2014

WTI rebounds on geo-political tensions in Ukraine and Libya

Gold slightly lower on Thursday: Gold prices were modestly lower on Thursday and hit a four month low. A downbeat U.S. GDP report released did help to lift the gold market p a bit from its day low. The preliminary U.S. GDP report for the 1Q14 fell 1.0%, which was a bit worse than market expectations.

WTI higher on Ukraine worries: WTI prices ended higher despite the EIA report showed that the U.S commercial crude oil inventories increased by 1.7mnbbls from the previous week.

Oil prices were underpinned by supply disruption worries as Ukraine launched air strikes to put down a separatist revolt and Libya struggled to rein in rebels.

Time Currency Impact Event Forecast Previous

30 th May 2014 Friday

5:30pm USD Medium Core PCE Price Index m/m 0.2% 0.2%

5:30pm USD Medium Personal Spending m/m 0.2% 0.9%

6:45pm USD Medium Chicago PMI 60.2 63.0

6:55pm USD Medium Revised UoM Consumer Sentiment 82.9 82.8

02nd June 2014 Monday

7:00pm USD High ISM Manufacturing PMI - 54.9

Gold Spot

Technical Strategy: Play the range

Gold closed at US$1,255, below the 5 - DMA which is at US$1,265. However, RSI and Stochastic are oversold and suggest that the downside is limited. KASB Securities Limited recommends playing the range of US$1,251(Yesterday's low) - US$1,265.

A break below US$1,250 can target US$1,237 (January's low); while a break above US$1,265 can target US$1,277 (10 - DMA).

Silver Spot

Technical Strategy: Buy on Weakness

Silver closed at US$19.02, above the 23.6% retracement of US$18.55 - US$20.37 which is at US$18.98. A test of US$19.25 (10 - DMA) is likely. KASB Securities Limited recommends buying on weakness above US$18.98 targeting US$19.25; with stops below US$18.55 (May's low).

WTI Spot (Crude Oil)

Technical Strategy: Play the range

Oil closed at US$103.48, above the 15 - DMA which is at US$102.89. However RSI and Stochastic are bearish and suggest lower prices in the near term. KASB Securities Limited recommends playing the range of US$102.89 - US$103.91 (Yesterday's high). A break below US$102.89 can target US$102.18 (20 - DMA); while a break above US$103.91 can target US$104.46 (Weekly high).

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Source: Pakistan Press International

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