News Column

KASB Securities Limited and Economics Research - Commodities Corner

August 20, 2014



Gold loses safe-haven demand as equities gain

Gold declines upon strong U.S. data: Gold was stuck firmly below US$1,300 an ounce on Wednesday after a three-day losing streak, as strong U.S. housing data bolstered stock markets and dimmed bullion's appeal as a safe haven. While keeping an eye on mounting geopolitical tensions, investors were also awaiting minutes of the Federal Reserve's July meeting for clues about the U.S. central bank's monetary policy outlook.

Oil volatile as inventories shrink: WTI swung between gains and losses amid speculation that crude and fuel inventories fell in the U.S., the world's biggest oil consumer. On the geopolitical front, Iraqi forces, along with Kurdish fighters and U.S. warplanes, are seeking to reverse gains made by insurgents who have rampaged through the north of the country since capturing the city of Mosul in June.

Time Currency Impact Event Forecast Previous

20th August 2014 Wednesday

5:30pm CAD High Wholesale Sales m/m 0.40% 2.20%

7:30pm USD Medium Crude Oil Inventories -1.3M 1.4M

11:00pm USD High FOMC Meeting Minutes - -

21st August 2014 Thursday

5:30pm USD High Unemployment Claims 299K 311K

6:45pm USD Medium Flash Manufacturing PMI 55.7 55.8

7:00pm USD High Existing Home Sales 5.01M 5.04M

7:00pm USD High Philly Fed Manufacturing Index 20.3 23.9

Gold Spot

Technical Strategy: Sell on Strength

Gold closed at US$1,295, below the 5 - DMA which is at US$1,300. RSI and Stochastic are bearish and suggest lower prices. KASB Securities Limited recommends selling on strength below US$1,300 targeting US$1,288 with stops above US$1,307 (50 - DMA).

Silver Spot

Technical Strategy: Sell on Strength

Silver closed at US$19.38, below the 5 - DMA which is at US$19.53. RSI and Stochastic are bearish and suggest lower prices. KASB Securities Limited recommends selling on strength below US$19.53 targeting US$19.22 (Lower Bollinger) with stops above US$19.70 (10 - DMA).

WTI Spot (Crude Oil)

Technical Strategy: Play the range

Oil closed at US$92.82, below the 5 - DMA which is at US$93.74. However, RSI and Stochastic are oversold and suggest that the downside is limited. KASB Securities Limited recommends playing the range of US$91.92 - US$93.74. A break below US$91.92 can target US$91.10; while a break above US$93.74 can target US$95.09.


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Source: Pakistan Press International


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