Global Front Market May Remain Jittery and Commodity Trading Tips
Gold coming week, we are not hoping any candid performance on gold that can move higher. We are indeed expecting price volatility on gold in the next week. The investment demand which rose in the recent past has started to decline again and investment holdings are managing below 800 tons. In the other hand Fed’s comment is also likely to weigh on gold. As per the latest comments from minutes of the Fed’s FOMC meeting suggest that the Fed may continue to trim down its asset purchase programme. However, on the other hand, the recent economic data released from the US are turning unenthusiastic which might probably bring investment and safe haven buying demand on gold. Therefore, we are able to see a numerous factors weighing on gold commodity so believe it to trade in a very confined range. Meanwhile, the overall bearish scenario on gold has not changed yet. Post that gold witnessed a record fall over 25% in 2013; it’s the mere buying/recovery that are being felt in 2014 by driving price higher over 10%. However, structural issues still prevails on gold. The investment demand from the west have been muted, the jewellery demand is still low in Asian countries especially in India. As long as the economic releases continue to remain lower, and the euro currency advances possibly gold may remain on a marginally bullish tone. Looking at the above scenario we believe gold may remain subdued however, the economic data releases in the next week, suggest that the numbers may be further disappointing for the economy which may probably support gold to trade higher. Meanwhile, any further development on euro currency to trade either ways may make gold to trade on a volatile trend. At the domestic front, we expect gold prices might not fall much from the current levels as initially Indian rupee may trade on a weaker note. While, spot demand is expected to remain mostly stable. Overall, at the domestic front we expect gold prices to trade higher while at the global front market may remain jittery as well as volatile Gold’s April MCX futures prices traded higher in the last week. As of 21 February, 2014 prices are trading at 29891(3:56 PM IST). According to the Fibonacci principle, prices have retraced almost 78.6 percent (29883) of the fall from 30516 to 27517. We might see pullbacks before the uptrend resumes. On the weekly chart, prices are hovering in a trend channel and witnessing a trend channel resistance near 29950. The pivot point is seen at 29840. Support at 29429/28968/28092 Resistance at 30305/30720/31596. For short-term traders, we suggest buying near the support levels
Silver COMMING week expected to trade higher and likely that it may also outperform gold. In this regard we could probably initiate a ratio strategy where in we need to buy silver and sell gold future contracts. The reasons for expecting silver to trade strong are the rising physical demand in India and the investment holdings of silver at the I-shares holdings have increased. The investment holdings have increased from 335200 Toz to 336900 Toz. Meanwhile, the spot demand is moderately rising in India. Silver ready prices surged over Rs. 50 to 47,550 per Kg and weekly based delivery of Rs. 140- 15 to Rs. 47,350 per Kg. However, silver cons remained steady near Rs. 88,000 for buying and Rs. 89,000 for selling of 100 pieces We believe silver commodity may trade strong in the next week. Besides, the global economic scenario is also explained in detail in our weekly economic report. Also, at the local market we hold a bullish view on silver while we expect it to result minimal profits on the buy trade. Lastly, we also recommend taking gold and silver ratio trade strategy for the next week. Silver March MCX futures prices are expected to remain higher for the week ahead. Strong support is seen at 46000 levels, which is likely to hold the upside view for the week ahead. On the higher side stiff resistance is seen at 46245(61.8 percent retracement of the range 51881-42363). A significant break above 48245 could lead the gains to move towards 49844 levels. For short term traders we suggest buying on dips. Commodity Trading Tips BUY GOLD MCX APR ON DIPS NEAR 29725-29675 SL 29430 TGT 29900-30100 BUY SILVER MCX MAR ON DIPS NEAR 47150-47000 SL 46000 TGT 48000-48500
Gold coming week, we are not hoping any candid performance on gold that can move higher. We are indeed expecting price volatility on gold in...