MCX Gold April futures has breached the key support of Rs 45,600 and witnessed sharp decline. Meanwhile, price is still hovering in the downward sloping channel with immediate resistance near Rs 45,950 (5 day EMA), followed by Rs 46,980 (21 Day EMA). As per the Fibonacci extension, next key support for April future exists around Rs 44,980, followed by Rs 44,600. On the momentum front, RSI is hovering in the oversold zone (27) indicating weakness. However, this oversold nature of RSI could limit more downside in gold prices. Going by the above analysis price is expected to move in the band of Rs 44,600-45,600 with sideways to downside bias.
Strategy
Sell MCX Gold April at Rs 45,350 with a target of Rs 44,840 and a stop loss at Rs 45,700.
MCX Silver May futures erased its earlier gains as price breached the trend line support near Rs 68,800. Meanwhile, price is trading below the 50 day EMA support Rs 68,900, and below the recent bottom of Rs 68,500 suggesting weakness in the trend. Moreover, price is trading below the 5 and 21 day EMA (69,640, 69,850 respectively) suggesting weakness in the very near term. A sustained move below Rs 68,500 would extend the downside towards Rs 67,200, followed by Rs 66,400. Meanwhile, RSI is hovering below 50(46) suggests a sideways to the weaker trend. Hence, for the day price is expected to move in the range of Rs 66,500-68,500 with sideways to downside bias.
Strategy:
Sell MCX Silver May at Rs 68,400 with a target of Rs 66,500 and a stop loss at Rs 69,700.
(Ravindra Rao is VP-Head Commodity Research at Kotak Securities)
