Commodities Q211

Disclaimer.
Note: The views and opinions
expressed in this presentation are
mine and do not reflect that of Easy
Forex. It is for informational purposes
and is not a recommendation,
solicitation or offer to buy or sell the
commodities hereto mentioned.

Instability
The Japan crisis, the MENA conflict
and slower China activity imply a
slow down over the next 3-6 months.
Expectation is for lower demand and
therefore a retracement in pricing.
Additionally lower output of oil and
gas in the MENA region could have
global repercussions.

 Erratic weather and natural disasters

have also had an impact on costs and
supply.
All of these factors add to market
nervousness about commodity
risk/reward.
However, there are opportunities in
commodities.
Global demand is improving. US
competitiveness is improving due to a
low USD and gas prices.

 Crisis in Japan disrupts supply chain

but reconstruction will buoy shortterm weakness.
Negative real interest rates remain
supportive for commodities.
Supply constraints remain a key
driver of commodity prices.
Political shocks.

 Investor flows have had a significant

impact on prices as liquidity remains
high.
Regulatory risk impacting supply.
Prices/technicals have momentum.

Technical Analysts view on

Commodities.

Primary trend in commodities still

remain bullish.

Crude Oil (WTI)

Underlying trend remains bullish
despite recent correction with further
gains in crude likely.
Medium term support at USD90/bbl,
dips seen as buying opportunity.

 Focus is on the top of a 2-year bull

channel that intersects at 112.85.
The base of the bull channel
intersects at USD82.80/bbl.

Gold.
Bull trend remains intact
Strong support is expected at the
USD1,370 level where dips would be
seen as offering buying opportunities
The primary support is at $1,308
where a break is required for a
deeper pullback.

Silver.
Primary bull trend is still somewhat
intact however the metal was
overbought and therefore a
correction.
Current pullback should be seen as a
buying opportunity
Potential over the medium term is a
return to USD40/oz.

Fundamental view of
Commodities.

Oil
Recent increase in crude prices largely
due to MENA tension although demand
in late 2010 also was surprising.
WTI is expected to trade at a significant
discount to Brent (spread has widened
to over USD10/bbl) due to low take-way
capacity from the US mid-continent
region and a glut of production and

imports.
Demand up in 2010 by 3.3% due to
strong Chinese demand and a rebound
in North America. However growth
forecast for 2011 growth is 1.6%.
OECD demand expected to fall to 0.4%
in 2011 but non-OECD expected to rise
to 3.9%.
OPEC spare capacity remains at
historical high levels but has fallen
recently.

 Record demand was also seen in China

leading up to Chinese New Year.
Central banks remain net buyers but
pace has slowed.
Silver.
Silver is acutely volatile and this
presents a barrier of entry for some
investors.
Industrial demand increasing due to
solar cells grabbing 8% of the market.

 Investment demand remains the key

driver.
Chinese net imports grew 300% on
year in 2010 and is expected to remain
strong in 2011.
Growth in mine supply is expected to
be an average of 25% through to 2015.
Scrap supply is expected to rise with
prices.
Based on mine supply forecasts,
expectation is for a surplus of only

31 million ounces in 2011.

Thank you.