News Column

KASB Securities Limited and Economics Research - Commodities Corner

July 4, 2014

Gold lower on strong US payroll data

Gold heads south on strong US NFP data: Gold prices were lower on Thursday as the dollar extended earlier gains after US nonfarm payrolls rose more than expected in June. Improving data suggests that US interest rates could rise earlier than expected.

Nonfarm payrolls increased by 288,000 jobs, while the unemployment rate declined to near a six-year low of 6.1%.

WTI retreats as supply concerns ease: Crude oil prices fell lower on Thursday as easing supply concerns in Iraq and Libya offset the impact of rising US demand before the Fourth of July holiday.

Libya is ready to reopen two oil ports in the country's east and will resume exports as soon as possible after taking back control from rebels who blocked crude shipments for the past year. A stronger dollar also contributed to decline.

Time Currency Impact Event

4th July 2014 Friday

All Day USD - Bank Holiday - -

7th July 2014 Monday

5:30pm CAD High Building Permits m/m - 1.1%

7:00pm CAD High Ivey PMI - 48.2

7:30pm CAD Medium BOC Business Outlook Survey - -

Gold Spot

Technical Strategy: Play the range

Gold closed at US$1,320, above the 23.6% retracement of US$1,240-US$1,332 which is at US$1,311. However, RSI and Stochastic are bullish and suggest higher prices in the near term. KASB Securities Limited recommends playing the range of US$1,311-US$1,324 (5-DMA).

A break below US$1,311 can target US$1,302 (100-DMA); while a break above US$1,324 can target US$1,332 (weekly high).

Silver Spot

Technical Strategy: Buy on Weakness

Silver closed at US$21.11, above the 10-DMA which is at US$20.94. RSI and Stochastic are bullish and suggest higher prices in the near term. KASB Securities Limited recommends buying on weakness above US$20.94 targeting US$21.26 (weekly high), with stops below US$20.76 (yesterday's low).

WTI Spot (Crude Oil)

Technical Strategy: Sell on Strength

Oil closed at US$104.02, below the 5-DMA which is at US$104.93. RSI and Stochastic are bearish and suggest lower prices in the foreseeable future. KASB Securities Limited recommends selling on strength below US$104.93 targeting US$103.74 (50-DMA) with stops above US$105.56 (10-DMA).

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Source: Pakistan Press International

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