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Weekly Technical Analysis and Commodity Market Tips

Gold we may have to be cautious. At one hand it may continue to rise due to continuous geo-political concern in Russia while in the other hand, it may not rise substantially due to likely negative performance of euro in the next week. We have the inflation number coming up in the next week and likely that the inflation may remain muted. In this regard the euro currency might take a dip by which gold commodity may get moderately hitch in rising prices. Meanwhile, slowdown in the Chinese economy may bring in concern that in the near term physical demand may slowdown and because of which gold prices may restrict from the huge gains. From the derivatives front, we are seeing that in the near month contract i.e. in April COMEX and MCX volumes are high while the open interests are slowly fading. While, in the next contract in June along with price volumes and open interests are also rising. This indicates that prices may remain elevated in the next week while the gains could be minimal. We recommend buying gold with cautious approach for the next week Gold April MCX futures prices traded higher in the last week by reversing the previous week’s trend. As of 14 March, 2014 prices closes at Rs 30595, up by 1.35 percent from the previous week’s close. For the week ahead, we expect pullbacks initially before the uptrend resumes. The expected trading range for the week would be Rs 30031-30808 (38.2% -50% retracement of the range 34100-27517). For shortterm traders, we suggest buying near the support levels Gold Weekly Support at 30100-29700 Gold Weekly Resistance at 30900-31500 Weekly Trend: Up Silver, whitish precious metal continues to follow the broad direction of the much largely traded yellow metal, gold. It should be noted that silver as a commodity gets its demand from two different segments, i.e. the industrial segment along with the precious metals space in terms of jewelry, investments etc. While we had some bit of negative cues for the industrial metals space this week mainly from China wherein economic data disappointed meanwhile the credit conditions also raised alarms about the health of the economy. Due to this, base metals remained under pressure and also had a negative impact on silver commodity. For larger part of the week, silver underperformed gold though in the latter half when base metals stabilized post a huge drop and concerns about Ukraine started to rise again; we saw silver managing to outperform gold. It should be noted that gains in silver over gold this week came only in the last two trading days otherwise silver was performing similar or lower than gold.

Silver has a high beta and usually performs well when trading direction is clear. We feel the broader set of issues which have been driving gold prices higher are likely to support a better performance in silver next week, at–least initially. We feel the major issues next week would be first Ukraine-Russia standoff which is likely to see some major developments during the weekend (Please see our Weekly economy report for details). Secondly the FOMC meeting is due and any major comment from Fed officials could drive wide swings into the bullion basket next week along with silver. While volatility is likely to remain high, overall direction seems to be positive as of now and we recommend buying on declines in the commodity next week. For the gold/silver ratio we feel it might see some decline towards 63 marks Silver’s May MCX futures prices witnessed upside movements in the last week. As of 14 March, 2014 prices closes at Rs 47084. On the weekly chart, the immediate resistance is seen at Rs 47310. A breach and daily closing above Rs 48310 could lead the gains to move towards Rs 49100. The key support level to watch for the week is at Rs 46200. We suggest buying for short term traders Silver Weekly Support at 45500-44500 Silver Weekly Resistance at 48100-49500 Trend: Sideways

Commodity Market Tips BUY GOLD MCX APR NEAR 30475-30450 SL 30150 TGT 30700 SELL CRUDE OIL MCX APRIL NEAR 6120-6140 SL 6280 TGT 5980 SELL NATURAL GAS MCX MAR NEAR 278-283 SL 295 TGT 260

Weekly technical analysis and commodity market tips  

Bullion we may have to be cautious. At one hand it may continue to rise due to continuous geo-political concern in Russia while in the other...

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