Gold next week is expected to remain cautious as it has been rising continuously for the past five consecutive weeks. While there are key events expected in the consequently week which may impact the gold price performance with heavy volatility.
1)FOMC meeting in the US may have a strong impact on gold. Whole world is expecting the US fed to maintain its interest rate unchanged while it may cut down its asset purchase programme from $75 billion to $65 billion which can have negative impact on gold prices. However, unless that is stated clear gold may either remain vulnerable or stay volatile. Our in-house research continues to watch $1272-1275 as strong resistance zone. So only on break above the same the price direction may change
2) India's monetary policy meeting is also expected in the next week and likely that RBI may not develop any strong stance and because of which initially Indian rupee might depreciate which can help the local gold prices to continue its rise. However, as the week progresses the effect of weak Indian rupee against the US dollar might fade so gains in gold prices could curtail.
3) There are several economic data expected from euro-zone, US and some Asian countries in the next week which can develop huge volatility in the market. Our economic study suggests initially US dollar index might decline and the euro
Currency may appreciate and their impact to see on gold prices. In this regard gold prices may initially rise and then it may correct. Looking at the overall scenario we believe gold price may gain initially in the next week while from higher levels we could see selling pressure building in. So, we suggest both buying and selling futures contract in gold
Gold February MCX futures prices are expected to remain upside for the week ahead. According to the fibonacci principle, prices are witnessing a resistance at 29684(61.8% retracement of the range 30679-28075). On break above 29684 could lead the gains to move towards 29916(70.7%) followed by 30121(78.6%). Supports are seen at 29377 (50%) followed by 29210 (moving averages support). Pivot point is at 29397 (O-29288, H-29675, L- 28965, and C- 29552). For short term traders we suggest buying on dips
Silver next week may remain vulnerable while selling pressure could be seen from higher levels. As discussed in the last weekly report and have been discussing in our daily report about gold-silver ratio strategy where in recommending sell in silver and buy in gold futures contract. We believe the same scenario may exist in the next week too. Also, we are expecting global equities to correct further in the next and select metals are also likely to trade down which can help silver prices to correct in the near term. Nonetheless, at the local market fall in silver prices could be minimal due to Indian rupee depreciation. So price divergence between global and local silver prices could be noticed in the next week. Hence, we are suggesting sell in silver prices from higher levels at the local market with strict stop loss
Silver March MCX futures prices are trading in a consolidation range and expected to continue the same trend. As per the fibonacci principle, prices are witnessing a stiff resistance at 45990 levels (38.2% retracement of the range 51821-42385). From the past seven week's prices failed to post a closing above 45990 levels which has left the downside cues to remain intact. For short term traders we suggest both selling and buying.
Mr. Kiran Kumar Reddy, Technical Analyst and Founder of Charanwings Advisory Services providing trading advisory services in Equity, Derivatives and Commodity. He provides advisory services to large number of retail as well as Institutional Investors and traders and His advisory services giving back support to various broking houses and product support in Stock Futures, Commodity Tips to Dalal Street Investment Journal (dsij.in) since May 2012. He is also having good command in elliot wave theory his articles have also been published in various financial websites and he is also contributing daily news letter on equity market, which were published in Indian notes website. He also made a guest appearance in various workshops which were conducted on stock market awareness http://www.charanwings.com
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