Karachi, March 05, 2013 (PPI-OT): Commodities structure continues to display fragility

Wall  Street  managed  to  stage  a  late  comeback  and  ended  the  session  in  the  green  despite concerns about growth and China’s housing market.

According to KASB Securities Limited News reports showed that  China  planned  to  tighten  the  housing  market  through  higher  down  payments  and  lending rates, which spurred worries on the growth outlook.   -

Lack  of  conviction  in  crude  products  saw  price  action  swerving  around  a  band  but  eventually succumb to selling pressure (WTI -0.6%, Brent -0.3%). Near-term, the tone in  US equity markets and overall risk sentiment will set the environment for crude prices;  however the US dollar will continue to have a say in the matter.-

In the precious metal complex, price action however drifted lower during the London  and US session despite FOMC member Yellen coming out to say that the buying support  from the Fed will continue well into the recovery. Similarly the Euro kept kicking after  investor  morale  in  Germany  witnessed  an  up-tick  while  the  broader  reading  for  the  region plummeted offering a stark contrast of fortunes within the bloc.

Source: www.forexfactory.com/calendar

Gold Spot

Technical Strategy: Buy on Weakness

Gold price behaviour after making a low US$1,555 during mid Feb appears to be striving to  bottom   out.   Although   yesterday   gold   witnessed   weakness,   recovery   early   today  accompanied with RSI behaviour and stochastic, hints at possible test of resistance at around  US$1,592 – 1,604. KASB Securities Limited  thus, recommend buying around US$1,578 with risk defined below  US$1,569.

Silver Spot

Technical Strategy: Buy on Weakness

Similar to gold, silver is also attempting to find a bottom through positive RSI divergence and  sharp  recovery  witnessed  in  the  previous  session.  Although  overall  structure  is  still  not  conducive in the medium-term, a pullback towards US$29.30 is anticipated in the near-term.  Buy around US$28.70 with risk defined below US$29.35.

WTI Spot (Crude Oil)

Technical Strategy: Sell on Strength

Breaking  below  200-DMA  is  not  a  good  omen  and  if  crude  sustains  below  the  same  this  could  hint  at  further  weakness  towards  US$89.00-88.00.  However,  given  that  crude  oil  bounced back from horizontal price support area of US$89.40 that was accompanied with  oversold momentum an upsurge towards US$90.84 cannot be ruled out. Consider counter  trend moves as an opportunity to sell with risk defined above US$91.67.