Gold futures moved higher after a consolidation break in the previous week. But prices failed to breach the key trend line resistance at Rs 48,500 and witnessed a decline on the last trading day of the week, suggesting a strong comeback by the bears. On the downside, strong support is seen at around Rs 47,800 (200-day EMA), followed by Rs 47,500. Momentum indicator RSI has moved back towards 50 (51) as it failed to hold its gains near 60, suggesting the sideways trend. The medium-term momentum has turned positive as MACD generated a crossover buy signal. So for the day, buying might be seen on dips towards the key support of Rs 47,800. Only a close below Rs 47,500 might reverse the trend sideways to lower.
Trading Strategy: Buy MCX Gold Oct at Rs 47,800. Target Price: Rs 48,400. Stop loss: Rs 47,500
MCX SILVER Sep futures has clearly turned around quite drastically during last week as price held the key support of the rising trend line near Rs 66,000. Now the price is hovering near midline of the Bollinger band channel, a move above would confirm the reversal in price trend and it would enter the bullish zone. Meanwhile, the strength index (RSI) is hovering near 50 (48), suggesting a sideways trend. A sustained move above 50 in RSI would strengthen the bull case. For the near term, Rs 66,500 and Rs 65,800 holds key support levels and Rs 68,950 and Rs 69,750 holds key price resistance. So for the day, the price is expected to move in the range of Rs 66,500-68,900 with a sideways bias. Only a sustained move above Rs 68,900 would bring fresh buying in silver and push it towards Rs 69,750.
Trading Strategy: Buy MCX Silver Sep at Rs 66,800. Target Price: Rs 68,900. Stop loss: Rs 65,800
(Ravindra Rao is CMT, EPAT, VP-Head Commodity Research, Kotak Securities Ltd. Views are his own)
