Commodity Insight Monday, February 22, 2016

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1 REK-228 Market Insight GOLD DROPS FROM 3-MONTH HIGH ON PROFIT TAKING Gold dips as dollar, stocks strengthen; but holds above $1,200 Gold extended losses below its highest level in a year on Monday as the dollar and equities strengthened, but the metal remained underpinned above $1,200 an ounce as caution in financial markets prompted investors to channel money into bullion. The metal jumped to a one-year high earlier this month on turmoil in the stock markets and concerns over the global economy, but posted small losses last week on profit-taking and as equities consolidated. Bullion remains one of the best performing assets of the year with gains of 15 percent as global uncertainties linger and fund inflows support the rally. Top consumer China has been on the offer since its return from a week-long holiday last Monday, a sign they do not expect prices to go much higher and cannot be counted on to support the market with post-lunar New Year demand set to falter. WTI Crude gains further in Asia, Brent up nearly 2% Crude oil prices gained further in Asia on Monday with the front-month contract up following a drop in U.S. drilling activity last week. Last week, oil prices fell sharply on Friday, as market players continued to focus on a global supply glut and amid doubts over the likelihood of a collective cut happening anytime soon. On Friday, consultant Baker Hughes said the U.S. rig count fell by 26 to 413 in the week ended Feb. 19. But the U.S. Energy Information Administration said Thursday that U.S. crude stockpiles increased by 2.1 million barrels last week to an all-time high of million barrels, underlining concerns over a domestic supply glut. Yen holds weakness in Asia after PMI, Aussie up The yen weakened in Asia on Monday and the Aussie gained in a fairly light regional data day that saw a weaker than expected preliminary PMI reading. USD/JPY changed hands at , up 0.20%, while AUD/USD changed hands at , up 0.22%%. In Japan the initial manufacturing PMI for February fell to 50.2, compared with a level of 52.0 seen from 52.3 the previous month. The U.S. dollar index, which measures the greenback's strength against a tradeweighted basket of six major currencies, was last quoted at 96.85, up 0.23%. On Saturday, China dismissed Chairman Xiao Gang from his post at the China Securities Regulatory Commission and replaced by Liu Shiyu, chairman of the Agricultural Bank of China, likely in response to the failure of the stock market's circuit breaker mechanism. CENTRAL BANKS RATES S y m b o l Interest Rate A U D 2.00% CN Y 4.35% CA D 0.50% EU R 0.05% GBP 0.50% CHF -0.75% USD <0.50% JP Y 0.10% Source: Forex Factory, InvestCap Commodities Research MAJOR CURRENCIES/INDICIES Symbol Rate TREND EUR/USD BEARISH GBP/USD BEARISH USD/JPY BEARISH Dollar Index NEUTRAL S&P500 1,914 BULLISH DJ30 16,362 BULLISH FTSE100 5,915 BULLISH Source: Metatrader, InvestCap Commodities Research WGC SPDR TRUST (ETF) Total Gold in Trust Tonnes: Ounces: 22,565, Value US$: 29,006,902, ISHARES SILVER TRUST Total Silver in Trust Tonnes: Ounces: 310,952, Value US$: 4,778,121, Page 1 of 6

2 CRUDE GOLD OPEN 1, , HIGH 1, , LOW 1, , CLOSE 1, , EMA 1, EMA 1, EMA 1, EMA 1, RSI (14 Days) ADX (14 Days) RANGE Gold price failed to hold ground above 1234 and fell sharply to test 1212 support. Although the stochastics in short time frames have entered oversold region but ther is still room for correction. Holding below 1212 & 1219 may trigger further decline towards region. Whereas stability above 1219 followed by the breakout of 1234 will activate the bullish scenario targeting region. OPEN HIGH LOW CLOSE EMA EMA EMA EMA RSI (14 Days) ADX (14 Days) RANGE Crude oil price moves near the key resistance 32.56, as stochastic shows positive signals that push the price to show more potential bullish bias, which urges monitoring the price behavior carefully at the mentioned resistance, as breaching this level will push the price to achieve more gains that might reach to mainly. Until now, we continue to suggest the overall bearish trend that moves organized inside the main bearish channel that appears on chart, it might be preceded by some temporary rise affected by stochastic and the EMA50 positivity, noting that breaking level will form good negative factor that supports the chances of heading towards our main targets that begin at and extend to Page 2 of 6

3 OPEN HIGH LOW CLOSE SILVER 20 EMA EMA EMA EMA RSI (14 Days) ADX (14 Days) RANGE Silver price fell sharply in the morning session to breach and held below it. Holding below this level confirms the temporay negativity to test and levels. Therefore, we will continue with our neutrality until the price manages to breach one of the above mentioned levels to continue the bearish scenario. EURUSD OPEN HIGH LOW CLOSE EMA EMA EMA EMA RSI (14 Days ADX (14 Days) RANGE The EURUSD pair settles below level, while the EMA50 continues to push negatively on the price, which keeps our bearish overview valid for the upcoming period, supported by the negative signals offered by stochastic on the four hours time frame. Therefore, we are waiting negative trading in the upcoming sessions, and the targets begin at and extend to after breaking the previous level, reminding you that holding below represents the most important condition to continue the suggested decline. Page 3 of 6

4 GBPUSD OPEN HIGH LOW CLOSE EMA EMA EMA EMA RSI (14 Days) ADX (14 Days) RANGE The GBPUSD pair opened this week s trading with bearish price gap that put the price away from the previously broken intraday bullish trend line, which turns into resistance now at , as this resistance represents the first protecting factor to the continuation of the recently suggested bearish bias. On the other hand, the EMA50 and stochastic form negative factors that reinforce the chances of continuing the decline in the upcoming period, which encourages us to continue suggesting the bearish trend that its targets begin by testing level, noting that the price might be forced for some temporary rise to cover the mentioned gap before resuming the bearish bias, which will remain valid and active unless breaching level and holding above it. M A R K E T S U M M A R Y F e b F e b O P E N H IG H USDJPY L O W C L O S E M O V I N G A V E R A G E 2 0 E M A E M A E M A E M A R S I ( 1 4 D a y A D X ( 1 4 D a y s) R A N G E The USDJPY pair keeps its stability below level, while stochastic offers negative overlapping signal on the daily time frame, to keep the negative pressure valid and active for the upcoming period, waiting to resume the correctional bearish wave that targets followed by levels on the short term basis. In general, we continue to suggest the bearish bias on the intraday and short term basis unless breaching level and holding above it, as breaching this level will push the price to retest the most important resistance for the short term trading at before any new attempt to decline. Page 4 of 6

5 COTTON OPEN HIGH LOW CLOSE EMA EMA EMA EMA RSI (14 Days) ADX (14 Day RANGE Cotton price tested its 20 day EMA at Stability above will keep the price action positive and may test the major resistance at Overall the trend is neutral until the price shows clear stability over the above mentioned resistance to reflect signs of reversal. ECONOMIC CALENDAR T ime Currency Impact Actual Forecast Previous 3:10am A U D M RBA Assist Gov Debelle Speaks 1:00pm EUR M French Flash Manufacturing PMI EU R M French Flash Services PMI :30pm EU R M German Flash Manufacturing PMI EUR M German Flash Services PMI :00pm EUR M Flash Manufacturing PMI EUR M Flash Services PMI Source: Forex Factory, InvestCap Research Page 5 of 6

6 DAILY TRADING STRATEGY GOLD BEARISH TRADE 1 SELL: 12,221,233 TARGET: 12,061,201 STOPLOSS SILVER BEARISH TRADE 1 SELL: 15.28,15.45 TARGET: 14.95,14.85 STOPLOSS CRUDE OIL (FEB) NEUTRAL TRADE 1 BUY: 32.,25,31.25 TARGET: 33.80,34.10 STOPLOSS (GOLD) EUR-USD BEARISH TRADE 1 SELL: , TARGET: , STOPLOSS (GOLD) USD-JPY BULLISH TRADE 1 BUY , TARGET: , STOPLOSS (GOLD) GBP-USD BEARISH TRADE 1 SELL: , TARGET: , STOPLOSS ICOTTON NEUTRAL TRADE 1 SELL: 60.00,60.80 TARGET: 58.90,58.50 STOPLOSS Disclaimer This report has been prepared by Invest Capital Markets Limited (ICML) and is provided for information purposes only. Under no circumstances is to be used or considered as an offer to sell or solicitation of any offer to buy. While all reasonable care has been taken to ensure that the information contained therein is not untrue or misleading at the time of publication, we make no representation as to its accuracy or completeness and it should not be relied upon as such. From time to time Invest Capital Markets Limited and any of its officers or directors may, to the extent 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 decisions without undue reliance on this report and the company accepts no responsibility whatsoever for any direct or indirect 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 report may not be reproduced, distributed or published by any recipient for any purpose. The views expressed in this document are those of the Economic Research Department and do not necessarily reflect those of ICML or its directors. Customer service commodity customer.services@investcapital.com (Ext 4809) All rights reserved by Invest Capital Markets Limited. This report or any portion hereof may not be reproduced, distributed or published by any person for any purpose whatsoever. Nor can it be sent to a third party without prior consent of Invest Capital Markets Limited. Action could be taken for unauthorized reproduction, distribution or publication. Page 6 of 6