Friday, August 19

Commodity Weekly Report, 27 July 2013


The China PMI manufacturing shows decline for fourth consecutive month in June at 47.7 reading.

Asian markets have been supported by gains in German PMI manufacturing and rising new US home sales throughout the week.

However, Dow Jones Average Index (DJIA) seems to be fizzling out as it wobbles at 14,550 levels.

Yellow metal and crude closed lower on Friday as US dollar strength surges amid speculation in US policymakers tapering stimulus after September.

Gold prices reached 1,340 tops as we forecast while the bears took over on Friday.

The market closed at 1,328 regions for the weekend as profit-taking emerged.

This week, we foresee the market will continue to be capped at 1,335 to 1,340 areas with strong selling resistance.

Downside targets are identified at T1 – 1,305 and T2 – 1,270 levels if the bears initiate its southern journey.

Abandon your short-view if the trend pierces above 1,340 resistances.

WTI Crude prices have turned down from recent highs at 108.92 after liquidation for profits occurred in market.

Technically, we foresee the market will be slowing down as long traders continue to unwind this week.

The range will probably trade from 103.50 to 107.50 areas before a slide follows through.

The bears may reach 101 in near future if weekly inventories begin to pile up.

Last Wednesday, Energy Information Administration (EIA) showed the weekly contraction at minus 2.8 million barrels and very near to forecast.

Crude Palm Oil Futures (FCPO) on Bursa Derivatives closed at 2,178 in October delivery month.

The volume rose to 23,500 turnovers just for this trading month alone while open interest dropped, suggesting some short-coverings in market.

This week, the trend will struggle to recover above 2,200 but we predict strong resistance will emerge at 2,220 levels.

Beware if the demand fails to clear above 2,200 levels as this may further dip to 2,100 bottoms.