Commodities Strategies: How gold and silver may trade today

By Ravindra Rao

MCX Gold February futures failed to hold its gains after breaching the higher end of consolidation range Rs 48,600-49,700 and slid towards the support of Rs 49,250 (5 Day EMA). Meanwhile price is facing resistance of 21 day EMA (49,650), which could be the key level for the day. As mentioned in our earlier views, price needs to sustain above Rs 49,650-49,700 zone to rise further towards Rs 49,900, followed by Rs 50,200. On the downside below Rs 49,250 (5 day EMA) strong support holds around Rs 48,800. On the momentum front RSI is trading around 50 (49) suggesting sideways trend. However RSI needs to support the bull case by moving above 50. For the day price is likely to move in the broad range of Rs 48,900-49,650 with sideways bias.

Strategy:
Buy MCX Gold Feb at Rs 49,100 with a target of Rs 49,700 and a stop loss at Rs 48,800.

MCX Silver March futures on the daily charts has formed an indecisive doji candlestick pattern suggesting an unclear price trend. As per the pattern, price needs to breach the key resistance of Rs 67,850 to extend its rally towards Rs 68,500, followed by Rs 69,800. On the other hand key support exists around Rs 66,500; failure to hold might extend the downside towards the next support at Rs 65,500, followed by Rs 64,700. On the momentum front RSI has moved above 50(52) suggesting sideways to up trend. For the day any move outside of the range Rs 66,500-67,850 would decide the trend in Silver price.

Strategy:
Buy MCX Silver Mar at Rs 67,850 with a target of Rs 69,800 and a stop loss at Rs 66,500.

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