Commodity strategies: Gold and silver

Ravindra Rao

MCX Gold futures surged higher on Friday following a weaker than expected US jobs report. Having hit the key resistance level at Rs 47,600 (200-DEMA), a breakthrough of the 200-DEMA would push it further higher towards the previous top at Rs 47,750, followed by Rs 47,900. Meanwhile, the bullish crossover of 8-and 50-DEMA has supported the bull case. The downside support holds around Rs 47,230, followed by Rs 46,900. The medium-term momentum has turned positive as the MACD index generated a crossover buy signal. So for the day, the price is expected to move in the range of Rs 47,230-47,750 with a sideways to higher bias. Only a close above Rs 47,750 would bring fresh buying interest in gold futures.

Trading Strategy: Buy MCX Gold Oct at Rs 47,250. Target price: Rs 47,750. Stop loss: Rs 47,000

MCX Silver futures followed the path of the yellow metal as the dollar continued to trade lower following softer than expected US job numbers. On Friday, the price breached the higher band of the consolidation range at Rs 64,600-62,400 and hit the 50-DEMA at Rs 65,550, suggesting bullishness in the trend. A trade through 50-DEMA would push it towards the key resistance of Rs 66,000 (200-DEMA), which could be the higher range for the day. On the downside, Rs 63,900 and 62,900 holds the key support zone for the day. On the momentum front, RSI has moved above the 50 zone, which has strengthened the bull case. So as long as Rs 62,900 holds, price is expected to move towards Rs 66,000. Only a sustained move above Rs 66,000 would bring fresh buying interest.

Trading Strategy: Buy MCX Silver Dec at Rs 64,200. Target price: Rs 66,000. Stop loss: Rs 62,900

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

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