By Ravindra Rao

Gold futures have gone back and forth during the course of the week following mixed economic numbers. Gold August futures witnessed a pause in its rally after retracing 61.8% of the previous downtrend near Rs 48,450. So, the price has to move above the 61.8% Fibonacci level to push towards the next key resistance of Rs 48,750, followed by Rs 49,000.

The key support for gold holds around Rs 47,780 (20 DEMA), followed by Rs 47,460 (recent bottom). The short-term momentum (fast stochastic) has reversed its gains after rallying towards the overbought zone of 90, which reflects a phase of correction.

However, the RSI is showing a sideways trend as it stood close to 50 (54), suggesting sideways bias. For the day, the price is expected to trade in the range of Rs 47,780-48,450 with a sideways bias. Only a close below Rs 47,780 would extend the weakness towards Rs 47,500-47,460 zones.

Trading Range: Rs 47,780-48,450

MCX Silver futures lost the most during the last trading session of the week as it failed to breach the key resistance of Rs 70,250 (higher Bollinger band). Price is trading below the midline of the Bollinger band channel, suggesting a change in the intermediate trend.

Moreover, the lower end of the intermediate rising channel has also been penetrated. Now, the key support for price holds around Rs 67,200 where lower Bollinger band coincides with the rising trend line support. Below Rs 67,200, Rs 66,500 holds the next key support. On the upside, Rs 69,300 (20 DEMA) is the first hurdle, followed by Rs 70,250.

Meanwhile, a sharp drop in the RSI (from 51 to 41) indicates weakness in strength. For the day, the price is expected to hit the key support of Rs 67200 and if price breaks Rs 66,500, then the short-term trend would turn negative.

Trading Range: 67200-69300

(Ravindra Rao is Head – Commodity Research at Kotak Securities Ltd)