Commodity strategies: How gold and silver may trade today

By Ravindra Rao

MCX Gold April futures witnessed sharp decline as it failed to hold the key support at Rs 45,850. Meanwhile, price is still hovering in the downward sloping channel with immediate resistance near Rs 46,280 (5 day EMA), followed by Rs 47,150 (21 Day EMA). On the other hand, key support holds around Rs 45,600 (recent bottom), followed by Rs 45,400. On the momentum front RSI is hovering in the oversold zone (28) that could limit more downside in gold prices. Going by the above analysis, price is expected to move in the band of Rs 45,600-46,280 with a sideways bias. Only close above Rs 46,280, would push price towards the resistance zone of Rs 46,600-46,700.

Buy MCX Gold April at Rs 45,850 with a target of Rs 46,280 and a stop loss at Rs 45,600.

MCX Silver May futures held the key support of the rising trend line near Rs 68,500 and witnessed rebound. Meanwhile, price is trading above the 50 day EMA support of Rs 68,700, which could be the key level for the day. However, price is trading below the 5 and 21 day EMA (69,890, 69,900 respectively) suggesting mild weakness. So, price needs to sustain above Rs 70,000 to extend its rebound and resume the uptrend. Meanwhile, RSI is hovering near 40 suggesting sideways to weaker trend. It needs to move above 50 to strengthen the momentum in price. Hence for the day, price is expected to move in the range of Rs 68,500-69,900 with a sideways bias. A close above Rs 70,000 would be the first indication of bull strength.

Buy MCX Silver March at Rs 68,800 with a target of Rs 70,000 and a stop loss at Rs 68,000.

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

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