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Commodity strategies: Gold, silver

Ravindra Rao

MCX Gold futures has dipped below the 20-day EMA support of Rs 47,250, suggesting a possible correction. The Bollinger band analysis on the daily charts suggests a consolidation phase as price is hovering around the midline of the band. The support holds around Rs 46,750, followed by Rs 46,500 (-2 SD). On the flipside, Rs 47,600 (200- DEMA) acts as a crucial resistance. RSI is not indicating any clear direction as it is hovering around the neutral zone of 50 (46), suggesting a sideways trend. So for the day, the price is expected to move in the range of Rs 46,750-47,600 with a sideways bias. Only a close above Rs 47,600 would bring fresh buying interest in gold futures.

Trading Range: Rs 46,750-47,600

MCX Silver futures dipped towards the 8-DEMA support at Rs 64,200, which limited the downside. On the upside, a trade through 50-DEMA would push it towards the key resistance of Rs 66,000 (200-DEMA). On the downside, a move below Rs 64,200 would extend the fall in price towards the next key supports at Rs 63,200- 62,900 zones. On the momentum front, RSI is hovering near 50, suggesting a sideways trend. So in the near term, the price seems to consolidate in the band of Rs 64,200-65,500. Only a sustained move above Rs 65,500 would bring fresh buying interest in silver futures.

Trading Range: Rs 64,200-65,500

(Ravindra Rao is CMT , EPAT, VP-Head Commodity Research, Kotak Securities Ltd. Views are his own)

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