Gold August futures traded in a range during the last trading session as the price failed to move above the key resistance at Rs. 47380 (250-day EMA). It seems the market is stuck between the range of Rs. 46600-47380 after last week’s sharp decline. The bearish crossover of 10 and 50-day EMA has diminished the bullish bets in gold futures. On the momentum front, MACD has reversed as the histograms turned negative, suggesting a sideways to weaker trend. RSI hovering around 35 also suggests a weaker trend.
So for the day, the trading range seems to be between Rs. 46600-47380. Only a closing break on either side would bring more clarity to the trend. A move below Rs. 46600 would bring renewed selling pressure and push the price towards Rs. 46200. On the other hand, a move above Rs. 47380 would extend the upside towards Rs. 47700-47900 levels.
Strategy:
The trading range for MCX Gold August futures lies between Rs. 46600-47380.
MCX Silver July futures have continued to move in a sideways trend from the beginning of the week. For July futures, Rs. 66900 (61.8% Fibonacci retracement level) holds the key support, if the price fails to hold the said levels, then it would weaken towards Rs. 65500. Similarly on the upside, Rs. 68900 holds as a key resistance. If Silver manages to settle above Rs. 68900, then it would test the next key resistance zone of Rs. 69750-70200.
Short-term momentum has turned negative as RSI is hovering near 35. So for the day, the price might continue to move in the range of Rs. 66900-68900 with a sideways bias. Only a close below Rs. 66900 would extend the weakness towards Rs. 65500.
Strategy:
The trading range for MCX Silver July futures lies between Rs. 66900-68900.
(Ravindra Rao, CMT, EPAT is VP-Head Commodity Research at Kotak Securities)
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