KASB Securities Limited and Economics Research

Karachi: According to KASB Securities Limited, • Gold was supported by downward pressure on the USD and investor optimism ahead of a key meeting between France and Germany today.

• From a technical perspective, gold’s Stochastic Oscillator maintains its downtrend as well as its sell signal, while the RSI continues to hover in the overbought region.

• The first support is at $1,752.07 and second support is at $1,737.44. The first resistance is at $1,775.74 and the second resistance is at $1,785.85.

Gold exhibits decent volatility; ends in the green
Gold halted a downslide in prices and rose on Monday supported by weakness in the USD (‐1.4% vs. EUR) and general rise in investor’s optimism ahead of the French‐ German meeting on Tuesday. The meeting is aimed at continuing talks to devise a framework for tackling the debt crisis which has threatened to swamp Italy and Spain. Markets are also awaiting a regulatory report from the SEC that will show holdings of hedge funds and institutional investors in 2Q11. Of particular interest will be the investor holdings in SPDR Gold Trust, the world’s largest gold‐backed ETF.

Technical Strategy: Sell on Strength
Gold recovered from its day’s low to close the session in the green and around its day’s high. This could potentially be a “Dead Cat Bounce”. The Stochastic Oscillator maintains its downtrend as well as its sell signal, while the RSI continues to hover in the overbought region. This also makes its formation a “Bearish Divergence”. The first support is at $1,752.07 and second support is at $1,737.44. The first resistance is at $1,775.74 and the second resistance is at $1,785.85.

WTI Spot (Crude Oil)

• Crude ignored a bearish manufacturing index reading and headed up as investor optimism mounted ahead of the France‐Germany meeting today.

• From a technical perspective, WTI’s Stochastic Oscillator maintains its uptrend as well as its’ buy signal, while the RSI maintains a steady uptrend as well.

• The first support is at $87.00 and second support is at $86.12. The first resistance is at $88.76 and the second resistance is at $89.64.

Crude profits from investor optimism
Oil prices jumped by US$2.50 as positive sentiments regarding leaders attaining a solution to tackle the EU’s debt crisis gained momentum. Risky assets profited as a result and Wall Street equities also closed in the green (Dow Jones +1.9%, S&P +2.2%). On the other hand, a contraction in the Empire State Manufacturing Index was partially ignored despite the reading persisting in negative territory for the third month.

Technical Strategy: Buy
WTI continued on its uptrend and registered a higher high to close in the green. Moreover it managed to close above its critical resistance as well as its 400‐DMA, which had created resistance for it. This translates into a breakout. The Stochastic Oscillator maintains its uptrend as well as its buy signal, while the RSI maintains a steady uptrend as well. The first support is at $87.00 and second support is at $86.12. The first resistance is at $88.76 and the second resistance is at $89.64.

Silver Spot

• Silver edged higher (+2%) but failed to break the US$40 mark, despite coming to within a whisker of it during the day.

• From a technical perspective, silver’s Stochastic Oscillator maintains its uptrend as well as its buy signal, while the RSI maintains its gradual uptrend as well.

• The first support is at $39.33 and second support at $38.76. The first resistance is at $40.46 and the second resistance is at $41.07.

Silver gains for a second day
Silver edged higher gaining 2% but failed to break the US$40 mark. Regulatory data released showed holdings of iShares Silver Trust, the world’s largest silver‐backed ETF drop 0.7% to 9,706 tonnes on Friday. Investors will await key industrial production numbers for the US today that may have a follow‐through impact on silver demand.

Technical Strategy: Buy
Silver registered a higher high and a higher low to close in the green. Moreover it maintained itself above the 30‐DMA. The Stochastic Oscillator maintains its uptrend, as well as its buy signal while the RSI maintains its gradual uptrend as well. Moreover the MACD has started to conform to an uptrend and in the near term could potentially generate a buy signal. The first support is at $39.33 and second support at $38.76. The first resistance is at $40.46 and the second resistance is at $41.07.

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