CommoditiesCorner

GoldSpot

High volatility, reduced safehaven appeal and rumors of hedge fund

From a technical perspective, golds Stochastic Oscillator maintains its

Thefirstsupportisat$1,610.78andsecondsupportisat$1,566.23.Thefirst
resistanceisat$1,677.18andthesecondresistanceisat$1,692.03.

26September,2011

AiyazHassan
[email protected]
KASBSecuritiesLimited
Ph.No.(9221)111222000Ext:379

FahdNiaz
[email protected]
KASBSecuritiesLimited
Ph.No.(9221)111222000Ext:448

Gold Commodity (1,740.43, 1,754.93, 1,629.13, 1,656.80, -83.3300)

1900

1850

1900

1850

$1856.62
$1816.76

1800

1800

$1752.18

1750

1750

30-DMA
$1700.00

1700

Goldprices(Spot)

1700
50-DMA

$1647.80

1650

US$/oz.
Open
High
Low
Close

Date
30DMA
50DMA
200DMA
9DRSI
14DRSI
25DRSI

Date
30DMA
50DMA
200DMA
9DRSI
14DRSI
25DRSI

1650

$1619.50
1600

1600

$1583.26

1550

1550
$1543.41
100-DMA

200-DMA

1500

1500
Relative Strength Index (35.2880)

80
70
60
50
40
30
20

27

4
July

11

18

25

1
August

80
70
60
50
40
30
15

22

29

5
September

12

19

26

Goldcontinuesitssharpdescent(8.6%WoW)(Bloomberg,Reuters)
Hitbyexcessivevolatilityanddiminishedsafehavenappeal,goldpricesclosed4.8%
intheredbringingtotalweeklylossesto8.6%.Thebleedinginglobalequitiesafter
fourdaysofselloffwasfinallyhaltedonFridayandindicesmanagedtorecordgreen
closings (Dow +0.35%, FTSE +0.50%, DAX +0.63%). Apart from this, certain rumors
fuelling the downslide of gold also emerged, hinting at hedge fund liquidation of
goldpositions.

TechnicalStrategy:SellonStrength
Gold took resistance from its 50DMA and witnessed significant pressure however
recovered from its days low only to close well into the red. Moreover it closed
below its critical support of $1,700.00. The Stochastic Oscillator maintains its
downtrend as well as sell signal while the RSI and MACD maintain their respective
downtrends as well. The first support is at $1,610.78 and second support is at
$1,566.23. The first resistance is at $1,677.18 and the second resistance is at
$1,692.03.

Refertoimportantdisclosuresonpage5

23Sep11
1,740.43
1,754.93
1,629.13
1,656.80

23Sep11
1,813.81
1,750.14
1,526.76
27.35
35.29
43.38

22Sep11
1,816.81
1,748.88
1,525.35
36.85
42.97
49.07

Change
0.30
14.80
111.00
83.33

Change
3.00
1.27
1.41
9.50
7.68
5.70

Source:Bloomberg,KASBResearch

Synopsis
Gold
WTI
Silver

SellonStrength
SellonStrength
SellonStrength

page1

CommoditiesCorner

WTISpot(CrudeOil)

Crude prices dropped to six week lows bringing losses to 9.50% for the
outgoingweek.

From a technical perspective, WTIs Stochastic Oscillator and RSI maintain

The first support is at $78.77 and second support is at $77.91. The first
resistanceisat$80.15andthesecondresistanceisat$80.82.

WTIprices(Spot)
US$/bbl
Open
High
Low
Close

Date
30DMA
50DMA
200DMA
9DRSI
14DRSI
25DRSI

Date
30DMA
50DMA
200DMA
9DRSI
14DRSI
25DRSI

WTI Crude (79.0700, 80.3400, 79.0700, 79.5800, -0.68000)

100

100

100-DMA

95

95

200-DMA

50-DMA

30-DMA

90

90

$87.10
85

85

$84.15
$82.54

80

80
$79.30
$75.13

75

75

$70.86
70

70

70
60
50
40
30

70
60
50
40
30

Relative Strength Index (32.9322)

16

23

31
6
June

13

20

27

5
July

11

18

25

1
August

15

22

29

6
12
September

19

26

Crudepricesplummet9.50%lastweek(Bloomberg,Reuters)
Oilextendedlosses,droppingtosixweeklows,asfreshconcernsovertheEurozone
added to the existing damage impacting financial markets from the Feds latest
murky assessment. While Greece shunned aside reports of larger losses for its
banking creditors, investors remained wary of the turmoil facing the nation as it
continuesitsstruggletomeetausteritytargets.

23Sep11 Change
79.07
1.19
80.34
0.08
79.07
1.19
79.58
0.68

23Sep11 Change
0.20
86.40
0.32
89.03
0.04
95.26
1.25
26.73
1.02
32.93
0.66
38.01

22Sep11

86.60

89.36

95.31

27.97

33.95

38.68

Source:Bloomberg,KASBResearch

TechnicalStrategy:SellonStrength
WTIcontinuedtowitnesspressureandtradedbelowitsresistancetrendline(orange
line) to close off the session on a negative note. The Stochastic Oscillator and RSI
maintain their respective downtrends as well as sell signals. Additionally the MACD
has assumed a downtrend while maintaining its sell signal. The first support is at
$78.77 and second support is at $77.91. The first resistance is at $80.15 and the
secondresistanceisat$80.82.

26September,2011

page2

CommoditiesCorner

SilverSpot

Investors rushed to exit positions in precious metals with silver losing a

From a technical perspective, silvers Stochastic Oscillator and RSI maintain

Thefirstsupportisat$28.83andsecondsupportat$26.43.Thefirstresistance
isat$31.42andthesecondresistanceisat$32.41.
Silver Spot (35.8775, 36.6075, 29.8237, 31.1400, -4.73250)

45

Silverprices(Spot)
US$/oz.
Open
High
Low
Close

Date
30DMA
50DMA
200DMA
9DRSI
14DRSI
25DRSI

Date
30DMA
50DMA
200DMA
9DRSI
14DRSI
25DRSI

45

44

44

43

43

42

42

30-DMA

41

41

40

40
$39.56

39

39

100-DMA

$38.10

38

38

50-DMA

37

37
$36.44

36

36
200-DMA

35

35

$34.13

34

34

33

$33.11

33

32

$31.36

32

31

31

30

30

$29.24

29

29
$28.07

28
27

28
27

$26.50

26

26
Relative Strength Index (22.9282)

60
50
40
30

60
50
40
30
13

20

27

4
July

11

18

25

1
August

15

22

29

5
September

12

19

26

Furtherhavocreinsinsilvertrading(23.50%WoW)(Bloomberg,Reuters)
Investors rushed to exit positions in precious metals on Friday (Platinum 4.4%,
Palladium 2.01%) as global equities ticked up following four disastrous days of
selling.Latertoday,theGermanIFOBusinessClimateisduetobereleasedwhichlike
lastweeksZEWEconomicSentimentisexpectedtoshowcontraction.

23Sep11
35.88
36.61
29.82
31.14

23Sep11
40.63
40.24
36.29
14.86
22.93
33.03

22Sep11
40.90
40.40
36.28
23.59
31.84
40.38

Change
0.00
0.73
6.05
4.73

Change
0.27
0.16
0.01
8.73
8.91
7.35

Source:Bloomberg,KASBResearch

TechnicalStrategy:SellonStrength
Silvertookresistancefromthe200DMAandclosedwellintothered.TheStochastic
Oscillator and RSI maintain their respective downtrends as well as sell signals.
Moreover the MACD maintains its downtrend as well as sell signal and has now
turnednegative.Thefirstsupportisat$28.83andsecondsupportat$26.43.Thefirst
resistanceisat$31.42andthesecondresistanceisat$32.41.

26September,2011

page3

CommoditiesCorner
Economic Calendar
Date&Time(PST)
Currency
26September,2011Monday
1:00pm
EUR
6:15pm
USD
7:00pm
USD
27September,2011Tuesday
6:00pm
USD
7:00pm
USD

Impact

High
Medium
High

Medium
High

Event

GermanIFOBusinessClimate
FOMCMemberRaskinSpeaks
NewHomeSales

S&P/CSComposite20HPIy/y
CBConsumerConfidence

Forecast

107.0

296k

4.4%
46.4

Previous

108.7

298k

4.5%
44.5

Source:www.forexfactory.com/calendar

26September,2011

page4

CommoditiesCorner
Glossary of Terms

DojiStar:aSpinningTopwhichgapsaboveorbelowthepreviouscandle.Itisareversalsignal,whichrequiresa
confirmationfromthenextcandle.IftheDojistargapsabovethepreviousgreencandle,itisabearishsignal
indicatingatopandviceversa.

DarkCloudCover:Alongwhitecandlestickisfollowedbyablackcandlestick.Theblackcandlestickopensabove
thewhitecandlestick'shighandcloseswellintothewhitecandlestick'sbody.
Inverted Hammer: A candlestick with a long upper shadow and a small body formed in a downtrend. The long
uppershadowandsmallrealbodyatthebottomofthetradingrangearecauseforconcernbythebears.They
wonderifthisistheendofthedowntrendandtakemeasurestoprotecttheirgains.Ifthenextdayopensabove
thebodyoftheInvertedHammer,thenexpectationscouldbeforshortstocoverandpropelareversalrally.
BullishPiercingLine:Abottomreversalsignal.Aredcandlestickfollowedbyagreencandlestickthatopenslower
than the red candlestick's low, but closes more than halfway into the red body. The gap down on the 2nd day
perpetuates the downtrend. However, the 2nd day's close is above the midpoint of the 1st day's body. This
suggeststothebearsthatabottomcouldbeforming.Themorepenetrationofthecloseonthe2nddaytothe1st
day'sbody,thestrongerthereversalsignal.
Hanging Man: A small body (white or black) near the high with a long lower shadow with little or no upper
shadow.Thelowershadowshouldbetwoorthreetimestheheightofthebody.Itisabearishformationduring
anuptrend.
ShootingStar:Asingledaypatternthatcanappearinanuptrend.Itopenshigher,tradesmuchhigher,andthen
closesnearitsopen.ItlooksjustliketheInvertedHammerexceptthatitisbearish.
SpinningTop:acandlewithasmallgap,negativeorpositive,betweentheopenandclose.Spinningtopsusually
indicateatrendreversal,butrequireaconfirmationfromthenextcandle.Iftheyareformedatthepeakofarally,
theyusuallyindicateatopandviceversa.
EngulfingBearishFormation:Asmallgreencandlefollowedbyandcontainedwithinalargeredcandle.Thisisusuallyan
indicationofatop.
EngulfingBullishFormation:Asmallredbodyfollowedbyandcontainedwithinalargegreenbody.
BullishDivergence:occurswhenpricesreachanewlowbutanoscillatororRSIreachesahigherbottomthanitreached
during its previous decline. This is known as a Class A bullish divergences. Class A bullish divergences are often the best
signalsofanimpendingsharprally.
RelativeStrengthIndex(RSI):TheRelativeStrengthIndex(RSI)isapopularoscillatorusedbytraders.Thename"Relative
Strength Index" is slightly misleading as the RSI does not compare the relative strength of two securities, but rather the
internalstrengthofasinglesecurity.Amoreappropriatenamemightbe"InternalStrengthIndex."
TheRSIisafairlysimpleformula,butisdifficulttoexplainwithoutpagesofexamples.
The Moving Average Convergence/Divergence indicator (MACD): is calculated by subtracting 26period exponential
movingaveragefrom12periodexponentialmovingaverage.A9perioddottedexponentialmovingaverage(the"signal
line")isautomaticallydisplayedontopoftheMACDindicatorline.
The Stochastic Oscillator: is based on stochastic mathematics. It compares where a security's price closed relative to its
tradingrangeoverthelastxtimeperiods.TheStochasticOscillatoralwaysrangesbetween0%and100%.Areadingof0%
showsthatthesecurity'sclosewasthelowestpricethatthesecurityhastradedduringtheprecedingxtimeperiods.A
readingof100%showsthatthesecurity'sclosewasthehighestpricethatthesecurityhastradedduringtheprecedingx
timeperiods.TheStochasticOscillatorindicatesanoversoldstatebelow20%andanoverboughtstateabove80%.

26September,2011

page5

CommoditiesCorner

BollingerBands:isatypeofenvelopedevelopedbyJohnBollinger.BollingerBandsareplottedatstandarddeviationlevels
aboveandbelowamovingaverage.Themovingaveragegenerallytakenisa20DMA,whilethestandarddeviationcountis
2.Thisisaverygoodtogaugeboththegeneraldirectionandthevolatility.

KASBSecuritiesLimited,5thFloor,TradeCentre,I.I.ChundrigarRoad,Karachi
ThisreporthasbeenpreparedbyKASBSecuritiesLtd.("KASB")andisprovidedforinformationpurposesonly.Undernocircumstancesis
tobeusedorconsideredasanoffertosellorsolicitationofanyoffertobuy.Whileallreasonablecarehasbeentakentoensurethatthe
information contained therein is not untrue or misleading at the time of publication, we make no representation as to its accuracy or
completenessanditshouldnotberelieduponassuch.FromtimetotimeKASBandanyofitsofficersordirectorsmay,totheextent
permitted by law, have a position, or otherwise be interested in any transaction, in any securities directly or indirectly subject of this
report. This report is provided solely for the information of professional advisers who are expected to make their own investment
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consequential loss arising from any use of this report or its contents. In particular, the report takes no accounts of the investment
objectives, financial situation and particular need of individuals, who should seek further advice before making any investment. This
reportmaynotbereproduced,distributedorpublishedbyanyrecipientforanypurpose.Theviewsexpressedinthisdocumentarethose
oftheKASBSecurities&EconomicResearchDepartmentanddonotnecessarilyreflectthoseofKASBoritsdirectors.

26September,2011

page6