Commodity strategies: How gold and silver may trade today

MCX Gold February witnessed rebound from the support zones of Rs 48,600-48,700 after last week’s sharp decline. Meanwhile price is trading below the 50 per cent Fibonacci retracement level (49,700) of the recent up move, which could be the key resistance zone for the day. On the downside below Rs 48,900, key support holds near Rs 48,600 followed by 200 day EMA support at Rs 48,450. On the momentum front RSI is trading below 50 (41) suggesting weakness. We expect price to move in the band of Rs 48,900-49,700 with sideways bias. Only close below Rs 48,900 would take price further towards Rs 48,600.

Strategy:
Sell MCX Gold Feb at Rs 49,650 with a target of Rs 48,900 and a stop loss at Rs 49,900.

MCX Silver March also witnessed rebound after last week’s sharp decline. Meanwhile key resistance for silver futures exists around Rs 66,400, followed by 67,050 (5 day EMA) which could act as good supply zones. Earlier price has breached the bullish channel and retraced below 50 per cent Fibonacci level (64,760) of the up move. Meanwhile price is trading below the 21 day EMA (67,120) along with weaker RSI suggesting weakness in trend. On the downside key support holds near Rs 63,140 (61.8 per cent Fibonacci level). So for the day price is expected to move in the band of Rs 64,500-67,100 with sideways to downside bias.

Strategy:
Sell MCX Silver Mar at Rs 66,400 with a target of Rs 64,500 and a stop loss of Rs 67,300.

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