By Ravindra Rao
Gold and silver prices were trading mixed but were near the flatline in Friday’s session, amid uncertainty over economic stimulus package from the US. Here is a trading strategy for the bullion counters:
Gold
MCX Gold breached the lower trend line support of a rising wedge, but managed a higher closing yesterday. Candlestick study and wedge break shows that today’s trend is bearish, with resistance placed near Rs 51,200. Immediate support is at Rs 50,490, below which the bears might get an edge to take the price close to Rs 50,100. Relative Strength Index (RSI) is at 49.68, favoring bears over bulls.
Strategy
- Sell MCX Dec Gold at Rs 51,000
- Target price at Rs 50,500; Stop loss at Rs 51,200
Silver
MCX Silver price is trading in a band of Rs 64,200-59,500, suggesting a sideways trend. The bearish candlestick pattern and double top resistance near Rs 64,150 indicates bears gaining strength in the near-term. Rising wedge break has materialized as the bears pulled the price lower till Rs 62,000 on break of Rs 62,750. Immediate support is placed at Rs 61,600 followed by Rs 61,100. RSI is at 47, supporting bears.
Strategy
- Sell MCX Dec Silver at Rs 63,500
- Target price at Rs 61,600; Stop loss at Rs 64,150
(Rao is VP-Head commodity Research, Kotak Securities)