News Column

KASB Securities Limited and Economics Research - Commodities Corner

June 25, 2014



Commodities rise on Iraq conflict

Gold prices higher on weaker equities: Gold prices closed higher on Tuesday, due to weaker equity markets and continued violence in Iraq. Furthermore, expiry of options in the US, and GDP data release could lead to enhanced volatility today.

Oil fluctuates on Iraq conflict: US crude oil prices remained volatile, as ISIS fighters battled the Iraq Army over control of the largest refinery in Iraq.

However, market participants expect that a supply disruption is unlikely. In other news, the OPEC Secretary General said that there was no supply shortage in the market.

Gold Spot

Technical Strategy: Play the range

Gold closed at US$1,318, above the 50% retracement of US$1,241-US$1,392 which is at US$1,313. However a test of US$1,302 (100-DMA) is likely. KASB Securities Limited recommends playing the range of US$1,302-US$1,325 (Yesterday's high). A break below US$1,302 can target US$1,295; while a break above US$1,325 can target US$1,331.

Silver Spot

Technical Strategy: Buy on Weakness

Silver closed at US$20.87, above the 200-DMA which is at US$20.37. RSI and Stochastic are bullish and suggest higher prices in the near term. KASB Securities Limited recommends buying on weakness above US$20.56 (Friday's low) targeting US$21.13 (Yesterday's high) with stops below US$20.37 (200-DMA).

WTI Spot (Crude Oil)

Technical Strategy: Buy on Weakness

Oil closed at US$105.91, above the 10-DMA which is at US$105.81. RSI and Stochastic are bullish and suggest higher prices. KASB Securities Limited recommends buying on weakness above US$105.81 targeting US$107.37 with stops below US$104.89 (15-DMA).


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Source: Pakistan Press International


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