KASB Securities Limited and Economics Research-Commodities Corner

Karachi, October 31, 2013 (PPI-OT): US Fed portrays optimism over economic recovery

Pressure on crude oil remained and it was seen trading at four months low as US crude stock piles gained significantly. Moreover, crude supplies from one of the largest fields of Libya are likely to start next week.

According to KASB Securities Limited thus, any upside would remain under check due to increasing supply.
Gold prices succumbed to the optimism portrayed by US Fed on economic recovery after retesting highs of US$1,358, which creates a case for winding of monetary stimulus.

 Source: Bloomberg, Reuters 
Key events/data releases 
Time       Currency Impact     Event                       Forecast Previous 
30 October, 2013 Monday 
12:00pm    EUR      Medium    German Retail Sales m/m        0.5%    -0.2% 
8:30am     EUR      Medium    German Consumer Climate        7.3      7.1 
12:45pm    EUR      Medium    French Consumer Spending m/m   0.2%    -0.4% 
5:30pm     USD      High      Unemployment Claims            341k    350k 
1 November, 2013 Monday 
2:30pm     GBP      High      Manufacturing PMI              56.3     56.7 
7:00pm     USD      High      ISM Manufacturing PMI          55.3     56.2 
 

Gold Spot

Technical Strategy: Sell
Gold failed to hold support at US$1,339 which hints that a small rising wedge formation is in play. This could lead to further decline towards US$1,310. KASB Securities Limited thus recommend selling with risk defined above US$1,347 with aforementioned support as the target area.

Silver Spot

Technical Strategy: Sell
Silver in tandem with gold also appears to have lost its lustre at least in the near –term; this is despite a positive chart structure in the medium term. So far in today’s session, the metal price has engulfed previous day gains and hints at further weakness and test of support at US$21.80. Sell with risk defined above US$22.80.

WTI Spot (Crude Oil)

Technical Strategy: Buy
WTI is approaching a support area defined by US$96.00. RSI also appears to be in diverging mood. This could potentially result in a small pullback and test of resistance towards US$97.50. KASB Securities Limited recommend buying with risk defined below US$96.00.