Crude oil price remains buoyant with the September contract surges to as high as 72.42 before pulling back in European morning. While fundamentals for crude remain weak, strong macro-economic data are needed to support price at current level.

As oil supplies in the market is still abundant, OPEC will very likely keep current production unchanged at the meeting in September. According to Sheikh Ahmed Abdullah al-Sabah, Kuwait's oil minister, said yesterday that the possibility of further production cut has been ruled out.

Natural gas continues to trade above 4 although the full storage problem persists. The shutdown of a pipeline in the Gulf of Mexico triggered worries about supply disruptions. The US Energy Department may report gas supply increased by +62 bcf to 3085 bcf in the week ended July 31.

Unlike crude oil, gold price fails to rebound but continues to edge lower. Currently trading at 963, the precious metal's outlook will be volatile but range-bounded. Major determining factors are inflation expectation, movement of USD, investment demand and jewelry demand.

Central bank selling has remained low as CBGA II approaches the end by late-September. According to ECB, a Eurosystem central bank sold 0.28 metric tons of gold for the week ending 31 July 2009. Sales for the month of July were low at 0.61 metric tons (excluding Sweden and Switzerland whose data are not yet available). Year-to-date, gold sales have been just over 140 metric tons, far below the annual quota of 500 metric tons.

Platinum price retreats to 1282 after rallying for 5 consecutive days by more than +10%. We do not believe recent rise has ended yet, Rather we expect it to resume after consolidation. Threats of production suspension persist in South Africa. Workers are negotiating pay rises with Eskom, the dominant power company in the country, and threatened strikes from next week, Potential power outage will definitely halt production in gold and platinum.

At the same time, price for platinum will gain support from recovery in auto industry and the cash rebate program in the US. Emerging markets will be leading the recovery, In July, auto sales in China and India increase +59% and +30% respectively.