Commodities strategies: How gold and silver may trade today

Commodities strategies: How gold and silver may trade today

By Ravindra Rao Gold August futures struggled to hold on to their gains in the last week as the price failed to breach the initial resistance of Rs 49,400. The prices closed below Rs 49,000 with the formation of a Doji candle on the weekly charts, suggesting indecision among investors. On the daily charts, MCX Gold August futures had formed a bearish engulfing pattern on Friday, which could prevent the bulls from taking charge again.

RSI on the daily charts has erased some of its gains as it dipped towards 54, suggesting a phase of correction. Meanwhile, key support for August futures exists around Rs 48,600 (20 DEMA), followed by Rs 48,400. Hence, a move below Rs 48,400 would weaken the price trend. On the other hand, failure to breach Rs. 48,400 would once again push the price towards the initial resistance of Rs 49,200-49,400 levels.

Strategy:

The trading range for MCX Gold August futures lies between Rs 48400-49200.

MCX Silver July futures remained in the range of Rs 72,800-70,800 during the entire week, forming an inside-day candle, suggesting a sideways trend. RSI on the daily charts is hovering around 54 suggesting a sideways trend. So, in the near term price might continue to move in the range of Rs 70,800-72,850 with a sideways bias. Only a closing break above the Rs 72,850-73,500 zone would extend the upside. On the flip side, a move below Rs 70,800 would change the trend to neutral.

Strategy:

The trading range for MCX Silver July futures lies between Rs 70800-72850.

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

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