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After trading in a narrow range for most part of the week, the MCX Gold contract saw a sharp 2.8 per cent rally on Friday to close at Rs 30,726, up by 2.7 per cent for the week. The contract has been consolidating sideways between Rs 29,270 and Rs 30,850 since its sharp fall from the September high of Rs 34,549. If the contract holds above Rs 29,500 there are good chances to see a corrective rally to Rs 32,500 in the near-term. The 21-day moving average is at Rs 30,770 and Rs 31,500 are the immediate resistances ahead. On the downside Rs 28,500 is a significant support below Rs 29,500.
For the medium-term, we can expect the contract to be broadly ranged between its crucial support at Rs 28,500 and resistance at Rs 32,500. The bias could turn bearish if the contract falls below Rs 28,500 and it can further decline to Rs 25,000-24,500 in the medium-term.
Silver (Rs 49,680)
The MCX Silver contract was ranged between Rs 48,190 and Rs 50,215 and closed higher by 2.1 per cent for the week. Immediate resistance is at Rs 50,000 and then the 21-day moving average resistance is at Rs 51,369. But since the support at Rs 48,500 is holding very well and is limiting the downside over the last couple of weeks, the near-term outlook is positive. Therefore, the contract can break the above mentioned resistances and rise to Rs 51,500-52,000.
However, the medium-term outlook is bearish for the silver contract with strong resistances at Rs 52,000 and then the 21-month moving average resistance near Rs 53,500. These resistances can cap the upside and the contract can fall to Rs 45,500-44,500 initially. An eventual break below Rs 44,500 can drag it further lower to Rs 41,500.
Copper (Rs 470)
The MCX Copper contract has been trading range-bound between Rs 450 and Rs 470 for the second consecutive week. A breakout on either side of this range will decide the contract’s near-term direction. A decisive break above the neckline resistance at Rs 470 will negate the double-top formed on the daily candle sticks chart and will take the contract higher to Rs 490-500. On the other hand, if the contract fails to break decisively above Rs 470, it can come down again to Rs 450. An eventual break below Rs 450 can take it further lower to Rs 430, the target of double-top pattern.
For the medium-term, Rs 510 is a strong resistance and rallies to this resistance can attract fresh sellers coming into the contract. As such, the medium-term outlook will be bearish for a fall to Rs 420-400 while the contract remains below Rs 510.
Crude Oil (Rs 6,533)
As mentioned in the previous column, the MCX Crude Oil contract has bounced back from its Rs 6,400-6,300 support zone, registering an intra-week low at Rs 6,370. However, immediate resistance is at Rs 6,650-6,700 band which needs to be broken for the contract to rise higher to Rs 6,900. Failure to rise above Rs 6,700 in the coming week will then leave room for one more leg of down move in the near-term that can target Rs 6,300. Medium-term outlook is bullish for the Crude Oil contract as Rs 6,300 is a very strong trend-line support which might not be broken easily. As such, the rise from this support at Rs 6,300 will have the potential to take the contract upwards to Rs 7,000 and even Rs 7,500 levels in the coming months.
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