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Commodity Strategies: How gold and silver may trade today

By Ravindra Rao

MCX Gold June futures have extended their rebound from the key support of 20 day EMA at Rs. 47260. The Bollinger band analysis on the daily charts suggests bullish bias as price is trading above the midline. The upper band resistance for price exists around Rs. 48220, which could be the ideal target in the near term. Meanwhile, recovery in the RSI has also strengthened the bull case. Support for the day is pegged near Rs. 47400 and strong support is near Rs. 47200. Resistance can be seen near Rs. 48220 followed by Rs. 48400. So for the day, price is expected to move in the band of Rs. 47400-48220. Only a close below Rs. 47200 would change the trend to neutral.

Strategy:

Buy MCX Gold June at Rs. 47500 with a target price of Rs. 48200 and a stop loss at Rs. 47180.

MCX Silver May futures witnessed a good rebound from the key support zone of Rs. 69800 (20 Day EMA) and closed above the 8 day EMA (70830), suggesting firmness in the trend. On the upside, Rs. 72450-72650 holds the key resistance zone, where the previous top and higher Bollinger band coincides. Momentum oscillator RSI is holding its ground above 50 (58) supporting the bullish view. To conclude, we expect silver to trade with a sideways to positive bias with strong support near Rs. 69800 and resistance near Rs. 72650. A sustained move above Rs. 72650 would extend the rally towards Rs. 73800-74000. On the contrary, failure to hold above Rs. 69800 would change the trend to neutral.

Strategy:

Buy MCX Silver May at Rs. 70800 with a target price of Rs 72500 and a stop loss at Rs 69800.

(Ravindra Rao, CMT, EPAT is VP-Head Commodity Research at Kotak Securities)

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