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KASB Securities Limited and Economics Research- Commodities Corner.

By Karachi, September 05, 2011 (Balochistan Times): Gold Spot According to KASB Securities Limited, Gold prices slipped as a rebound in Wall Street stocks eroded the appeal of the metal as an alternative investment. From a technical perspective, while golds Stochastic Oscillator has generated a weak buy signal, the RSI and MACD maintain its downtrend. The first support is at $1,778.20 and second support is at $1,766.82. The first resistance is at $1,800.14 and the second resistance is at $1,815.04. Bears dominate the gold market Bullion prices took a breather as Wall Street rallied, with all three major indices advancing over 2-3%, following a spate of good news, including a stronger-than expected July US consumer spending data, a merger between two Greek banks that the market believes may help open more doors for tackling the debt crisis in Europe, and less than expected damage caused by Hurricane Irene. The aftermath of the Jackson Hole Symposium, however kept a cloud of uncertainty looming over financial markets as the Fed Chairman had kept his cards relatively close to his chest and did not shut the door on further quantitative easing. Later today, minutes from the last FOMC meeting are due to be released and markets will be keenly waiting to determine the degree of dissent amongst the committee members. Technical Strategy: Sell on Strength Gold experienced a short-term recovery, which can be classified as an upward correction in a downward trend. Later it reacted from its critical resistance level at $1,836.48. The Stochastic Oscillator has generated a weak buy signal while the RSI maintains its downtrend. Moreover the MACD has taken to a downtrend and has now generated a sell signal. The first support is at $1,778.20 and second support is at $1,766.82. The first resistance is at $1,800.14 and the second resistance is at $1,815.04. WTI Spot (Crude Oil) Crude prices ended higher buoyed by a better than expected report on personal spending. From a technical perspective, WTIs Stochastic Oscillator, though overbought, maintains its uptrend as well as its buy signal. The first support is at $86.45 and second support is at $85.63. The first resistance is at $88.09 and the second resistance is at $88.91. Oil jumps up on encouraging consumer spending Oil rose on Monday helped by an upbeat report on US consumer spending which showed the largest expansion in five months (+0.8%). This partially alleviated concerns of a slowing economy as markets noted that the 3Q had begun on a better note. Apart from this, damage from Hurricane Irene was less severe than expected and the same contributed to the upside for oil. Technical Strategy: Buy WTI remained strong throughout the day to close in the green. Moreover it managed a closing above the 400-DMA and is on the verge of giving a breakout above its resistance trendline. The Stochastic Oscillator, though overbought, maintains its uptrend as well as its buy signal while the MACD continues to rise gradually and maintain its buy signal as well. The first support is at $86.45 and second support is at $85.63. The first resistance is at $88.09 and the second resistance is at $88.91. Silver Spot Silver tumbled with other precious metals as equities rebounded on reports that two Greek banks were on the verge of a merger. From a technical perspective, silvers Stochastic Oscillator has generated a weak buy signal while the RSI continues on its downtrend. The first support is at $39.94 and second support at $39.03. The first resistance is at $41.68 and the second resistance is at $42.50. Silver prices resume correction After a brief rebound in the previous two sessions, silver resumed its downtrend to close at US$40.87. The industrial metal tumbled with other precious metals (Platinum -0.50%, Palladium -0.53%) as equities rebounded on reports that two Greek banks were on the verge of a merger. The development was seen as an encouraging one as the banks would reportedly shore up additional capital in order to shield themselves from exposure to sovereign debt. Technical Strategy: Sell on Strength Silver failed to sustain its high and subsequently witnessed pressure to close in the red. The resultant formation is an Engulfing Bearish Formation which suggests an end of the short-term recovery phase. The Stochastic Oscillator has generated a weak buy signal while the RSI continues on its downtrend. Moreover the MACD has assumed a downtrend while maintaining its sell signal. The first support is at $39.94 and second support at $39.03. The first resistance is at $41.68 and the second resistance is at $42.50.

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Publication:Balochistan Times (Baluchistan Province, Pakistan)
Date:Sep 5, 2011
Words:798
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