Gold futures slipped and consolidated after rallying last week. It failed to breach the key resistance of 200-day EMA at Rs 47,600 and witnessed decline towards the immediate support near its 8-day EMA at Rs 47,020. At this point, the 200-day EMA (Rs 47,600) could act as a key resistance zone, which could limit the upside in price. So the price has to sustain above the 200-DEMA to extend its rebound towards Rs 47,800-48,000 zone. On the lower end if it fails to hold the support of 8-day EMA at Rs 47,020, it might erase the gains and price might test the key support at Rs 46,600-46,400 zone. On the momentum front, RSI is hovering near 50 (49), suggesting a sideways trend. So going by the above evidence, it is expected that price will move in the range of Rs 47,020-47,600 with a sideways bias. Either side’s break of the range would bring more clarity in the trend.
Trading Range: Rs 47,020-47,600
MCX Silver breached the lower end of the intermediate rising trend channel, forming a bearish flag (continuous pattern). Now the key support for price holds around Rs 61,500, which is the likely target/support for the day. A move below Rs 61,500 would extend the downside in price towards the next support zone at Rs 60,500-60,000. On the upside, 8-day EMA (Rs 63,200) would act as immediate resistance for price, followed by Rs 63,900. In case the price settles above Rs 63,900, it might move towards the next resistance at Rs 64,800 (20-day EMA). The weakness in the RSI (31) has supported the decline in price. So for the day, the price is expected to move in the range of Rs 61,500-63,200 with a sideways to lower bias. Only a close below Rs 61,500 would extend the downside towards Rs 60,500-60,000 zone.
Trading Range: Rs 61,500-63,200
(Ravindra Rao is CMT , EPAT, VP-Head Commodity Research, Kotak Securities Ltd. Views are his own)
Tapan Patel
Outlook: Bullion
Bullion prices traded firm on Friday with spot gold prices at COMEX trading near $1,783 per ounce while spot silver prices at COMEX were marginally up at $23.26 per ounce in morning trade. The precious metals fluctuated on stronger dollar and upbeat US data which raised market expectations of sooner Fed tapering. The dollar index rose to nine-month highs while US 10-year treasury yields fell to 1.24%, keeping gold prices in range. Growing worries over rising virus cases lent support to bullion, limiting the downside. We expect bullion prices to trade sideways to up for the day on mixed global cues.
Trading Strategy: MCX Gold October resistance for the day lies at Rs 47,600 per 10 gram with support at Rs 46,900 per 10 gram. MCX Silver September support lies at Rs 61,500 per kg, resistance at Rs 63,800 per kg.
Outlook: Crude Oil
Crude oil prices traded up on Friday with benchmark NYMEX WTI crude oil prices trading half a per cent up near $63.84 per barrel in morning trade. Crude oil prices gained in morning trade, paring some previous losses. We expect crude oil prices to trade sideways to down for the day.
Trading Strategy: MCX Crude Oil August support lies at Rs 46,90 per barrel with resistance at Rs 4,850 per barrel.
Outlook: Base Metals
Base metals prices traded firm with most of the metals recovering from previous losses. Base metals witnessed slump on weaker demand over growing virus cases in China followed by tighter restrictions. Earlier, copper prices fell to its lowest price since April and was headed for its worst week in two months. Copper prices may get support from possible supply crunch from major mines in Chile over labor issues on bonus packages. Base metals may trade sideways to up for the day.
Trading Strategy: MCX Copper August support lies at Rs 685 and resistance at Rs 702. MCX Zinc August support lies at Rs 245, resistance at Rs 250. MCX Nickel August support lies at Rs 1,390 with resistance at Rs 1,440.
(Tapan Patel is Senior Analyst, Commodities, HDFC Securities)
