30/01/2012 (The Star) - GOLD prices rallied strongly and penetrated above 1700.00 benchmarks after Federal Reserve chairman Ben Bernanke signalled the possibility of maintaining the near zero interest rate until 2014.

Greenback weakened and spurred higher prices in gold and crude instruments. In addition, lower-than-expected United States GDP for the last quarter also recedes the dollar value and caused the gold rally to continue on Friday.

This week, we reckon that gold prices may consolidate while maintaining the bullish bias with aim at 1800.00 benchmark level. We identified a strong resistance at around 1765.00 regions, which may provide an upper-bound for short-term consolidation range. Abandon bullish bias if gold prices slide below 1700.00 benchmark level, which serves as a strong support.

Silver prices rallied strongly beyond 33.00 benchmark regions after Fed announcement, and settled at 33.81 for the weekend.

The gold/silver ratio stayed below 52.3 for the whole week, signalling a persistent demand for silver from the market relative to gold.

This week, we foresee silver prices will continue marching up with strong support laid at 33.00 levels. There is a potential to reach up to 38.00 benchmarks if greenback weakens further.

WTI crude prices consolidated last week while supported by 97.50 levels. Market spiked up to 101.29 regions amid ongoing Iranian tension and weaker greenback.

Responding to EU ban on Iranian oil imports, Iran may possibly pre-empt an internal ban to export oil to European countries as early as this week, effectively creating supply issues for some European countries in lack of alternative supply arrangement such as Greece, Spain and Italy.

This week, WTI crude prices are likely to continue consolidating between 97.00 and 101.50 regions. The ongoing Iranian tension will keep oil prices well supported, especially if the internal Iranian ban creates substantial scarcity for Eurozone economies.

However, we still keep our view that WTI crude prices may plunge and test lower support at S2 — 94.00 regions over the medium term as long as the WTI crude prices stay below 102.00 regions.

Crude Palm Oil (CPO) Futures on Bursa Derivatives closed lower amid thin volume in short market week. The active month in April delivery closed at 3135 after failing to protrude beyond 3200 resistances last week.

This week, we foresee the wakening sentiment will continue and will possibly test the 3100 supports while topside resistance levels remain tough.

Some short-covering will be expected once the trend sinks beneath 3100 levels.