News Column

KASB Securities Limited and Economics Research - Commodities Corner

July 9, 2014



Commodities lower ahead of US FOMC meeting minutes

Gold slightly lower on profit taking: Gold prices were modestly lower on Tuesday, as the US dollar rally frizzled. Market participants are now eyeing the release of minutes from the Fed's June policy meeting on Wednesday in order to gauge the central bank's view on interest rates and economic strength.

WTI lower as supply fears fade away: Crude oil prices fell on Tuesday to the lowest levels in a month as Libya prepared to resume oil exports from two ports closed for nearly a year now. Supply from Iraq remained strong, despite violence sweeping the OPEC country. Exports in June were near a record high at 2.53mnbpd.

Time Currency Impact Event Forecast Previous

9th July 2014 Wednesday

7:30pm USD Medium Crude Oil Inventories - -3.2M

10:01pm USD Medium 10-y Bond Auction - 2.65|2.9

11:00pm USD High FOMC Meeting Minutes - -

11:30pm EUR High ECB President Draghi

Speaks

- -

10th July 2014 Thursday

5:30pm USD Medium NHPI m/m 0.30% 0.20%

5:30pm USD High Unemployment Claims 316K 315K

Gold Spot

Technical Strategy: Play the range

Gold closed at US$1,315, above the 23.6% retracement of US$1,240-US$1,332 which is at US$1,311. However, RSI and Stochastic are bearish and suggest lower prices in the near term. KASB Securities Limited recommends playing the range of US$1,311-US$1,324 (yesterday's high). 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 (last week's high).

Silver Spot

Technical Strategy: Play the range

Silver closed at US$21.01, above the 15-DMA which is at US$20.90. However, RSI and Stochastic are neutral and suggest that upside is limited. KASB Securities Limited recommends playing the range of US$20.90-US$21.26 (last week's high). A break below US$20.90 can target US$20.77 (Last week low); while a break above US$21.26 can target US$21.44.

WTI Spot (Crude Oil)

Technical Strategy: Play the range

Oil closed at US$103.45, below the 50-DMA which is at US$103.70. However, RSI and Stochastic are oversold and suggest that the downside is limited. KASB Securities Limited recommends playing the range of US$103.00 (lower Bollinger)-US$103.70. A break below US$103.00 can target US$102.43; while a break above US$103.70 can target US$104.43 (10-DMA).


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Source: Pakistan Press International


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