News Column

KASB Securities Limited and Economics Research - Commodities Corner

July 25, 2014



Gold drops due to improving economic sentiment

Gold below US$1300: Gold prices drifted lower on Thursday amid stronger US dollar and positive economic data from the US, EU, and China. US jobless claims data came in better than expected and was the lowest in nine years. Demand for the safe haven metal was further diminished as equity markets rallied and physical demand remained weak.

WTI moves lower on increasing supply: Crude oil prices closed lower as an improving supply picture offset strong Chinese factory data that could presage higher energy demand. European refiners have shut plants due to increasing imports of oil products from the US. Oil prices were also under pressure as the IMF chopped its 2014 forecast for global economic growth to take into account weakness seen early in the year in the United States and China.

Time Currency Impact Event

25th July 2014 Friday

5:30pm USD High Core Durable Goods Orders 0.6% 0.0%

5:30pm USD Medium Durable Goods Orders m/m 0.4% -0.9%

28th July 2014 Monday

6:45pm USD High Flash Services PMI - 61.0

7:00pm USD Medium Pending Home Sales m/m - 6.1%

Gold Spot

Technical Strategy: Play the range

Gold closed at US$1293 above the 200 - DMA which is at US$1,286. However, RSI and Stochastic are bearish and suggest lower prices in the near term. KASB Securities Limited recommends playing the range of US$1,286 - US$1,302 (100 - DMA). A break below US$1,286 can target US$1,281; while a break above US$1,302 can target US$1,308 (10 - DMA).

Silver Spot

Technical Strategy: Play the range

Silver closed at US$20.36, above the 200 - DMA which is at US$20.26. However, RSI and Stochastic are oversold in the short term charts and suggest that the downside is limited. KASB Securities Limited recommends playing the range of US$20.26 - $20.52. A break below US$20.26 can target US$20.12 (50 - DMA); while a break above US$20.52 can target US$20.77 (5 - DMA).

WTI Spot (Crude Oil)

Technical Strategy: Sell on Strength

Oil closed at US$101.99, below the 100 - DMA which is at US$102.33. RSI and Stochastic are bearish and suggest lower prices. KASB Securities Limited recommends selling on strength below US$102.33 targeting US$101.01 (200 - DMA) with stops above US$102.91 (50 - DMA).


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Source: Pakistan Press International


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