Saturday, August 20

Commodity Weekly Report 8 December 2013


The US unemployment rate was reported at seven per cent in November and it saw an additional 203,000 jobs. On Friday, gold prices rebounded from 1,210 bottoms to 1,240 levels after better job figures were reported while crude prices stayed firm.

Last week, European Central Bank (ECB) committed to low interest rates for an extensive period to ensure  a recovery, after cutting to 0.25 per cent in November. Bank of England also kept its benchmark rates unchanged at 0.5 per cent while maintaining bond purchase programme at 375 billion pounds.

Gold prices tested the support at 1,210 to 1,215 regions last week and bargain-hunting had started. This week, we reckoned that the market might reverse upwards from additional buying interest if short-covering arises.

Technically, the market might be prone to ascend to 1,255 targets while piercing above here could lead bulls at 1,290 regions. The yellow metal has strong support from inverse weakening dollar against both the euro and pound. Only abandon your long-term view if the trend breaks beneath 1,210 supports.

WTI Crude prices have finally been pushed up by contracting supply after many months of surpluses. The EIA reported that weekly inventories were at minus 5.6 million barrels due to supply cuts generated by demands in market.

This week, we foresee the trend will meet some selling pressure at 98.5 levels after it climbed up from below 92 levels over past one week.

Technically, the crude prices may draw down at 95 levels for correction this week while moving into consolidation.

Abandon your short-term view if the bulls go higher and cross the 98.50 resistances.

Crude Palm Oil Futures (FCPO) on Bursa Derivatives closed higher on Friday with February contracts settling at 2,667 levels. Approximately 29,000 contracts were traded in the market before closing for the weekend.

The bullish factor mainly came from weather concerns and shrinking ringgit. This week, we reckoned the market still maintained its bullish strength while crossing 2,700 will ascend to reach 2,760 regions. Support remained at 2,600 levels which should not be violated.