Gold and Silver Futures, Commodity Market Outlook: Nirmal Bang

GoldGold bounced to $916.5 per ounce on Monday (0830 IST) as its safe-haven allure waned on bets that global economic pain could be easing.

Gold settled down 60 cents at $914.90 an ounce on Comex on Friday after U. S. non-farm payrolls fell less than expected in April and investors took signs of an economic recovery as a reason to sell bullion held as a safe store of value.

However, the losses were limited as the dollar slipped to a six-week low against the euro and concerns that an economic recovery could spark inflation supported buying of the metal as a hedge against rising prices.

Gold is likely to trade up during the day as dollar has weakened sharply against the basket of currencies. This might trigger some uptick in the prices during the day. However, are not very bullish on Gold and upside might be capped at $925/oz. Silver we recommend to sell on rise as recent upside in silver seems to be bit overdone and prices may cool off from present levels.

Gold is showing a lot of strength. It just managed to give a close above the trend line and a firm trend in RSI also indicates a further upward movement in Gold prices. We believe closing above $920/oz might take Gold to $937/oz.

We recommend selling silver as we have seen a good rally from $11.72/troy ounce to $14.06/troy ounce, (+61.8%). It tried to breach $14.06 but failed and RSI has also dropped indicating that the upside will be capped in silver with a stop loss of $14.10.

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