Gold futures continued to consolidate in the range of Rs 47,000-47,700 since the beginning of the week. Most importantly, Dec futures closed above the key moving averages of 200- and 20-DEMA (Rs 47,380 and Rs 47,050), suggesting firmness in the trend. However, price has to move above the higher bound of the consolidation range at Rs 47,000-47,700 to resume the bullish momentum. The bullish crossover of 8- and 20-day EMA has supported the bull case. The short-term momentum turned positive as the fast stochastic generated a crossover buy signal. The medium term momentum (MACD) is in the bullish territory supported by MACD histogram. To conclude, price is likely to consolidate in the wide range of Rs 47,020-47,700 with a sideways to higher bias. Only a move above Rs 47,700 would push price towards Rs 48,000.
Trading Strategy: Buy MCX Gold Dec at Rs 47,350. Target: Rs 47,700/47,900: Stop loss: Rs 47,200
MCX Silver has breached the key resistance and previous top of the downward sloping trend channel at Rs 65,800, suggesting firmness in the trend. Now it has to sustain above Rs 65,800 to resume the rally towards the next hurdle at Rs 66,500. The bullish crossover of 8- and 50-DEMA has strengthened the rally along with a breakout of the downward sloping channel, which has fueled the bullish momentum in silver futures. On the oscillator front, fast stochastic is hovering in the overbought zone, which could bring profit booking at higher levels. From the above analysis, we expect the price to trade in the range of Rs 64,300-66,500 with a sideways to higher bias. A closing above Rs 66,500 may intensify the bullish momentum towards Rs 67,200.
Trading Strategy: Buy MCX Silver Dec at Rs 64,900. Target price: Rs 66,500. Stop loss: Rs 64,500
(Ravindra Rao is CMT, EPAT, VP-Head Commodity Research, Kotak Securities Ltd. Views are his own)
Tapan Patel
Here is a look at how different commodities are behaving in today’s market.
Outlook: Bullion
Bullion prices traded firm on Thursday with spot gold prices at COMEX marginally up ear $1,784 per ounce. Spot silver prices at COMEX rose by 0.37% near $24.35 per ounce in morning trade. Bullion prices traded higher, supported by a weaker dollar and worries from China’s Evergrande debt crisis. Silver prices outperformed gold on higher demand from industrial sector. Bullion prices are supported by global inflation worries on power shortages. Bullion prices may trade sideways to up for the day.
Trading Strategy: MCX Gold December resistance for the day lies at Rs 47,800 per 10 gram with support at Rs 47,200 per 10 gram. MCX Silver December support lies at Rs 63,800 per kg, resistance at Rs 66,800 per kg.
Outlook: Crude Oil
Crude oil prices traded firm on Thursday with benchmark NYMEX WTI crude oil prices firm near $83.45 per barrel in morning trade. Crude oil prices rallied to seven-year high on surprise weekly inventory drawdown and higher demand. The US EIA data showed that crude oil inventories fell by 0.43 mb last week. US crude oil stocks at Cushing, Oklahoma delivery hub hit their lowest levels since October 2018. We expect crude oil prices to trade sideways to up for the day.
Trading Strategy: MCX Crude Oil October support lies at Rs 6,150 per barrel with resistance at Rs 6,350 per barrel.
Outlook: Base Metals
Base metals prices traded mixed on Thursday. Most of the metals kept firm trading range after witnessing some correction. Renewed worries over China Evergrande may limit upside in base metals for the day. Aluminium prices continued upside on lower supply worries with curbs on smelters. The Chinese government has ensured to ease a power shortage in coming months. Base metals are surging as global energy crisis deepens the supply crunch and adds to inflation worries. Base metals may trade sideways to up for the day.
Trading Strategy: MCX Copper October support lies at Rs 778 and resistance at Rs 798. MCX Zinc October support lies at Rs 294, resistance at Rs 305. MCX Aluminium September support lies at Rs 243 with resistance at Rs 254.
(Tapan Patel is Senior Analyst, Commodities, HDFC Securities. Views are his own)
