Commodity Weekly Report March 25 2012

The commodity markets traded sideways last week. Uncertain trends were mainly due to slow down in China’s manufacturing data and Europe’s lethargy. Gold and crude oil waned in mid trend while waiting for new fundamen­tal strength. Crude prices reversed up US$3 range to 108.00 regions on Friday after reports said Iran would cut supply at 300,000 barrels daily due to tighter sanctions.

WTI crude prices traded largely inside 104.50 and 108.50 regions last week as we outlined previ­ously. The market trend was quite neutral now though it might ignite a new bullish engine anytime due to new fundamental strength. This week, we expect the support to re­main resilient at 104.50 and 105.00 regions while the trend might possibly re-test the topside 110.00 levels. Market is very sensitive now to trigger an up run anytime due to Gulf tension. Abandon your long-view if the market violates beneath the 104.50 supports.

Gold prices were showing neu­tral sentiment if it was threading inside 1,640 and 1,660 ranges. This week, we speculate some buying interest would emerge and lift the market to 1,680 regions. Second­ary target stayed at 1,710 levels if further strength was injected to market. Currently, the support was building up very strongly at 1,640 regions and plunging was possible only if this level gave way.

Crude Palm Oil Futures (FCPO) on Bursa Derivatives reversed up on higher prices on Friday after four consecutive days of losses. In overall, market remained in the buying sentiment after small correction early week.

On Friday, June delivery con­tract closed at 3,426 with more than 25,000 turnover in the whole market. This week, we keep our opinion unchanged and expect the market to be capped at 3,450 and 3,470 resistance levels while downside support tightened at 3,350 regions. However, short traders are warned to be cautious if the bulls break and settle above 3,470 levels.

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