13/12/2011 (The Star) - Gold prices moved in volatile fashion early last week between 1701.00 and 1755.00 regions ahead of EU Summit.

The yellow metal plunged drastically from a high 1756.16 to below 1710.00 regions within an hour after the disappointing outcome of the summit and flight back to US dollar as safe assets.

European Central Bank (ECB) cut the benchmark rates to 1%, matching the record low level. Most EU leaders agreed in principle to some financial control but no details have been worked out yet.

This week, we reckon gold market will continue to thread sideways from 1700.00 to 1750.00 regions as pressure from fundamental related news eases.

Lower targets at 1660.00 regions could be reached in early week if the selling pressure follows through from last Friday. Trade with caution if the trend breaks either way beyond 1760.00 or 1750.00 levels!

Silver prices moved in tandem with gold last week, plunging to 31.40 regions just after spiking above the 33.00 resistance levels after the ECB’s announcement.

Market recovered slightly on Friday by closing at 32.09. This week, we may see tight trading range for silver moving from 31.00 to 33.00 regions though resistance may begin to emerge at 32.50 regions. We prefer to pick short trades from topside resistance zone.

WTI Crude broke convincingly below the 100.00 benchmarks last week due to fear of recession from speculated failure in the EU summit. The market trend swung down to 97.37 regions but closed at 99.79 regions for the weekend.

The US oil inventory level increased 1.3 million barrels to 336.1 million barrels for the week ending Dec 2.

This week, WTI Crude prices may re-test 100.00 benchmarks but will probably face resistance in huge selling pressures. Technically speaking, only reversing up above 103.50 resistances will turn into bullish sentiments. Otherwise, the trend will more likely stay from 97.00 – 100.00 regions as sideways.

Crude Palm Oil Futures (FCPO) on Bursa Malaysia Derivatives was range bound last week from 3063 to 3133 regions. The market was in little movements as commodities remained bearishness amid dollar surge.

The most active February month closed at 3084 for the weekend while liquidity thinned in year-end season. This week, we maintain the view of market in range bound from 3000 to 3150 as in previous forecasts.

However, the technical outlook still favours bearish outlook.