Mr. Vivek Gupta, CMT - Director Research, CapitalVia Global Research Limited
Gold saw good drop last week with Comex and MCX markets saw a fall over 1.5% and over 2% respectively. Higher drop locally was on account of lower spot demand and Rupee appreciation. Weaker demand in Indian also resulted into under performance in October contract as equated to far month. Herein we should look at major factors which could continue to play negative on gold. Euro tumbled to multi year lows last week after ECB slashed interest rate by 0.1% across the board as inflation and growth remained a concern. Last week, we saw mostly better data from US though Monthly Jobs numbers disappointed. However despite the bad reading, broader markets expect this might be just a one-off event and not a trend thus we feel pressure on gold to continue. Backed by these aspects over broader optimism in the US economy, consistently surging equity markets and also looking at the rising US Dollar, we maintain our bearish stance on the commodity and look to sell the same on pull-backs next week.
Over all, MCX Gold October future is in bearish trend and sustaining around lower levels. For the coming week 26300/26000 will act as a major support whereas 27200/27500 will act as a major resistance level in MCX Gold October future. For the next week in MCX Gold, trader can use sell on higher level strategy, if MCX Gold October future sustains below the levels of 26800 then it could test the levels 26600/26300.
Technically, MCX Silver December futures is in bearish trend and sustaining around lower level from last couple of the week. For the coming week 41500/42900 will act as a major resistance levels where as 38400/37000 will act as major support in MCX Silver December futures. For the next week in MCX Silver futures, traders can use sell on higher level strategy, if MCX Silver December futures sustains below 40800 then it could test the levels of 39500/38400.