Commodities Outlook; weak US jobs report eases interest rate fears – KASB and AHC Research
By: Junaid Pervaiz,
KASB Securities Limited
+92 21 111 222 000
Gold gains after key US NFP data: Gold gained sharply on Friday as the US job reports failed to meet market expectations. US jobs data reported that 192,000 jobs were added against an expectation of 199,000 jobs. Market feared that a strong US jobs data followed by a string of strong economic US data could have prompted the Fed to lift interest rates sooner than expected.
Crude prices slipped as Libyan ports reopen on a new accord: Crude prices slipped, snapping a two-day winning streak, as worries about supply disruption eased after Libyan rebels occupying four eastern oil ports agreed to gradually end their eight-month old blockade. Investors are also watching the progress in talks between world powers and Iran on the Islamic Republic’s nuclear program.
Gold Spot: Buy on Weakness
We recommend buying on weakness above US$1,298 targeting US$1,310 (50–DMA), with stops below US$1,292.
Silver Spot: Buy on Weakness
We recommend buying on weakness above US$19.80 targeting US$20.14 (20–DMA) with stops below US$19.62 (Last week’s low).
WTI Spot (Crude Oil): Sell on Strength
We recommend selling on strength below US$101.27 targeting US$99.95 with stops above US$101.60 (Friday’s high).
By: Arif Habib Commodities
Gold held on to gains on Monday following its biggest one-day jump in more than three weeks as investor worries about an early U.S. interest rate hike eased when the nonfarm payrolls report failed to meet market expectations. Data on Friday showed that U.S. nonfarm payrolls increased by 192,000 jobs last month, slightly below economists’ estimate of 200,000. Markets feared that a strong jobs report, which followed a recent string of good economic data, could prompt a quicker tightening of U.S. monetary policy. Federal Reserve Chair Janet Yellen indicated last month that interest rates could rise in the first half of 2015. Low interest rates, which cut the opportunity cost of holding non-yielding bullion above other assets, had been an important factor driving bullion higher in recent years.
U.S. crude oil slipped on Monday to trade around $101 a barrel after Libyan rebels and the government agreed to end an eight-month oil port standoff, which has cost the OPEC producer billions in lost revenues. Libyan rebels occupying four eastern oil ports agreed with the government on Sunday to end their petroleum blockade. The restart of Libya’s eastern oil ports could release about 600,000 barrels per day (bpd) of crude, bumping up the OPEC producer’s output from around 150,000 bpd, but still far from the 1.4 million bpd it produced last July.
Technology stocks in Asia fell on Monday in thin trade with China markets shut for a public holiday and the Nikkei 225 down as the Bank of Japan starts its latest two-day monetary policy review. European stocks were lower on Monday, tracking losses in U.S. equity markets on Friday and as investors eyed upcoming earnings reports to be released throughout the week. Elsewhere, in metals trading, Silver for May delivery dropped 0.64% to $19.81 a troy ounce.
Gold: Sell On Strength
Oil: Sell On Strength
Silver: Sell On Strength