Commodities headed higher in Asian session on Monday as hopes of further quantitative easing from the Fed still are high. Moreover, investors also believed some concessions will be given to Greece although little hint was given after the meeting between German Chancellor Angela Merkel and Greek Prime Minister Antonis Samaras. The front-month contract for WTI crude oil price climbed to as high as 97.72 while the Brent crude contract moved above 115 again. The benchmark Comex gold contract remained firm after breaking above the resistance at 1640. Upside bias remained in the near-term.

Buoyant market sentiment in the US session last Friday was carried forward to Asian session today. According to a letter from Fed Chairman Bernanke to the Congressional oversight panel, the Fed believed "there is scope for further action" to "ease financial conditions and strengthen the recovery". While this reinforced the opinions that the Fed would announce further easing, the Jackson Hole speech by the end of the week and the release of the Beige Book are still the focus. Investors would find indications from the Fed Chairman Ben Bernanke's comments and economic developments in different aspects to gauge the likelihood of further easing and the tools in use.

In the Eurozone, little news came out from the meeting between German Chancellor Angela Merkel and Greek Prime Minister Antonis Samaras. Merkel stated that she has to wait after the troika's report before making decisions on whether to give Greece more time on its austerity measures. She wanted evidence to show that the debt-ridden country is committed to reduce its deficits. Meanwhile, a Reuters' report said that the ECB might set yield band target on bond purchases and the bond purchase program might be delayed after Germany's Constitutional Court decision on the legality of the ESM on September 12.

Commitments of Traders:

With the exception of gasoline, speculators were bullish towards the energy complex in the week ended August 21. Net length for crude oil futures rose +370 33 contracts to 230 415 while that for heating oil gained +2 504 contracts to 11 788. Net length for gasoline slipped -891 contracts to 70 120. Net short for natural gas futures fell -98 contracts to 66 377.

Speculators were bullish towards precious metals during the week. Net length for gold futures increased +16 380 contracts to 130 684 while that for silver added +5 613 contracts to 21 200. For PGMs, net length for platinum gained +6 360 contracts to 24 887 while that for palladium rose +1 652 contracts to 6 343.

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