News Column

KASB Securities Limited and Economics Research - Commodities Corner

June 27, 2014

Oil lower as export tensions ease in Iraq

Gold lower on Fed member's comments: Gold prices closed modestly lower on Thursday as a US Federal Reserve member, John Bellard, said that the central bank can raise interest rates sooner than expected. The bearish sentiment for gold was also supported as Chinese authorities uncovered a US$15.2bn illegal gold- financing scheme that dates back by at least two years. A crackdown on such schemes could slightly impact demand.

Oil slips as fears of export disruptions ease: US crude oil prices fell on Thursday as investors speculated that oil exports from Iraq would not be impacted due to the conflict in the country. Weaker than expected US personal spending data also pressurized US domestic crude prices.

Time Currency Impact Event Forecast Previous

27 th June 2014 Friday

5:30pm CAD Medium RMPI m/m 1.3% 0.1%

6:55pm USD Medium Revised Consumer Sentiment 82.2 81.2

30 th June 2014 Monday

6:45pm USD Medium Chicago PMI - 65.5

7:00pm USD High Pending Home Sales - 0.4%

Gold Spot

Technical Strategy: Sell on Strength

Gold closed at US$1,317, below the 5-DMA which is at 1,320. RSI and Stochastic are bearish and suggest lower prices in the near term. We recommend selling on strength below US$1,320 targeting US$1,305 (10-DMA) with stops above US$1,326 (Weekly high).

Silver Spot

Technical Strategy: Play the range

Silver closed at US$21.07, above the 200-DMA which is at US$20.35. However, RSI and Stochastic are overbought and suggest that the upside is limited. We recommend playing the range of US$20.55 (23.6% retracement of US$18.62-US$20.14) - US$21.14 (Yesterday's High). A break below US$20.55 can target US$20.35; while a break above US$21.14 can target US$21.54 (Upper Bollinger).

WTI Spot (Crude Oil)

Technical Strategy: Sell on Strength

Oil closed at US$105.60, below the 10 - DMA which is at US$106.05. RSI and Stochastic are bearish and suggest lower prices in the foreseeable future. We recommend selling on strength below US$106.05 targeting US$104.85 (20 -DMA) with stops above US$106.79 (Yesterday's high).

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Source: Pakistan Press International

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