Weekly Technical Analysis and Commodity Market Tips

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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 weeks trend. As of 14 March, 2014
prices closes at Rs 30595, up by 1.35 percent
from the previous weeks 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 short- term 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.
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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, atleast
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 Silvers 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