Most of the people like to trade these commodities as it exhibits high volatility. However, sometimes it becomes very challenging to trade as prices gets affected due to domestic as well as global environment. The recent example is of the yesterdays trading session, where we witnessed that Silver prices were moving higher and on other side Gold prices were moving lower sharply. This may have created confusion in the minds of trader as most of the time these both commodities trade in sync with each other.

 

Technical analysis works very in both commodities but in this channeling environment it is better to use intermarket relationship which can save traders from any kind of false break or speculation. We have been constantly gauging the relationship of USDINR, Comex Gold, to get an idea about the upcoming trend. This is not enough as relationship of EURUSD with Gold is even working very well.

 

We have been publishing daily research on Gold before the market opens. The below is the part of research which we published in the morning of 23rd January 2014, taken from “The Commodity Waves STU”, explaining our bullish stand on Gold although prices were moving lower in small downward moving channel.

 

MCX Gold 60 mins chart: (February contract)

 

 

 

Wave Analysis

 

For MCX Gold, in yesterdays update we mentioned that, “The one of the reason behind this is of USDINR depreciation which has bounced back from the support level and moving higher. We have often seen due to depreciation of currency, Gold and Silver prices moves higher.”

 

In the last trading session, Gold and Silver prices continued to move in the range bound movement due to depreciation of USDINR. Now, for USDINR arrived near the very important resistance 62. So, it will be crucial to see whether prices will be able to take out this level in coming trading session or not. If Indian currency takes out 62 level on upside, then we may see upside in Gold and Silver prices. On the other side, Indian market is in the topping process, so any downfall in market may create the pressure on the USDINR and accordingly strength can be seen in bullions.

 

As shown in 60 mins chart, prices are moving lower in the small downward sloping red channel within the upward moving channel as shown by red color. As per wave perspective, the entire down move from the 29350 looks corrective in nature. Now, on upside 29250 is the resistance level and move above this level can take prices towards 29400 where the resistance is in place. Whereas, on downside 29000 is the important support.

 

This is the research part only. During the trading session we even provided buy call when prices were moving lower.

 

MCX GOLD FEB: BUY ABOVE 29120, WITH STOP LOSS OF  29000, TARGETS: 29300 – 29400 - 29500 CMP:29065. TIME:  3:28PM

 

In today’s trading session we achieved target. Now question arises, will it break resistance? What next from here on? On 28th – 29th Federal Reserve meeting is coming for adopting stand on tapering of its Bond Buying Program. High Volatility is expected in next week. Don’t trade on news and get support from our research team to trade in the right direction or subscribe to “The Commodity Waves STU”

Which includes research on MCX Gold, Silver, Crude and Copper with important levels.