Commodity Trade Mantra

Gold, Silver prices rise on Short covering.

Gold, Silver prices

Gold, Silver prices rise

Gold posted its largest one-day gain, over 2% in more than three months in the previous session. Gold, Silver Bullions also rose on the news, FOMC members indicated that additional monetary policy accommodation could be necessary if the economic recovery lost momentum, or if inflation were too low or the downside risks to the forecast became great enough. Gold of late has been moving in tandem with assets that are perceived to be risky.

Comex Gold June futures prices shot up yesterday in Intraday Trade to $1579.8 on short covering from the lows of $1,526.7 seen on Wednesday & closed at $1574.9. Gold has bounced up as alerted repeatedly of the commodity having declined to over – sold conditions along with the Euro. Gold may now face resistance at $1605 & then at $1657 levels. A decline with a repeat close below $1540 may send Gold sharply down to $1270 levels also. MCX Gold June futures prices shot up yesterday in Intraday Trade to Rs. 28,598 from the lows of Rs. 27,855 seen on Wednesday. MCX Gold June futures prices further up at Rs. 28,729 on the extended weakness in the INR against the US$. MCX Gold may now face resistance at Rs. 28,990 & then at Rs. 29,368 levels till trades remain above Rs. 28,145.

The US$ May futures have shot up to 55.01 from the previous close of 54.6175 by now. The INR can reach a new low of 56.35, as also indicated earlier on the break of the important 54.28 support level.

Silver, as repeatedly alerted, has a strong technical support at $26.20 on the downside. Any breach with a sustained momentum on closing basis below this range may signal a strong bearish trend for Silver & may decline further to $22.60. Comex Silver July futures prices shot up yesterday in Intraday Trade to $28.30 on short covering from the lows of $26.73 seen on Wednesday & closed at $28.02. Silver may now face resistance at $29.62 & then at $32 levels. MCX Silver July prices shot up in Intraday Trade to Rs. 53,608 from the lows of Rs. 51,201 seen on Wednesday. MCX Silver may now face resistance at Rs. 54,595, 55630 & then at Rs. 58,240 levels till trades remain above Rs.52,150.

Gold may rise for a couple of trading sessions & may again decline towards the month end as June Futures contracts come close to expiry. Silver may also see some downside movements then. But rises in both can be expected from June onwards till above the crucial support levels as mentioned above.

Asian shares have tumbled on Friday and were on track for their worst weekly showing since September. Key benchmark indices edged lower in early trade to hit their lowest level in more than 18 weeks as Asian stocks fell on euro-zone debt worries. The barometer index, BSE Sensex, hit 18-1/2-week low below the psychological 16,000 mark. Foreign institutional investors (FIIs) sold Indian shares worth a net Rs 9.67 crore on Thursday, as per provisional figures from the stock exchanges. The BSE Sensex was down to 15,820. The S&P CNX Nifty was down to 4,790.

On 21 Feb 2012: Moneyline Nifty Positional Sell Call – Sell Nifty advised at 5689 for Targets 5365, 5185 & 5005. Add more only on a sustained momentum below 5005, for Targets 4915, 4690 & 4465.  Result: Target 4 achieved — Nifty May Futures at 4900 on 11 May 2012.— Nifty May Futures at 4767.45 today.

Spain’s borrowing costs shot up at a bond auction on Thursday and its troubled banks suffered a double blow, with shares in part-nationalized Bankia diving and 16 lenders – including the euro zone’s biggest – having their credit ratings cut. The euro hit a four-month low, extending the decline prompted by fears Greece may leave the euro zone and contagion jitters after Moody’s downgraded 16 Spanish banks. Holdings of the largest gold-backed exchange-traded-fund (ETF),New York’s SPDR Gold Trust, rose 0.17% on Thursday from Wednesday, while, that of the largest silver-backed ETF,New York’s iShares Silver Trust, climbed 1.08% during the same period.

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