Pivot point at 50,350 for MCX Gold this week; Silver may see volatility

The bears are likely to have the upper hand as long as MCX Gold futures trade below Rs 50,350 this week; Near resistance on the upside is seen at Rs 50,900.

The MCX Gold futures seem to be precariously poised near the 20-DMA (Rs 50,350), which is now likely to act as a pivot point and shall dictate the trend in the near term. On the other hand, select key momentum oscillators (MACD in particular) is exhibiting  divergent trend on the daily and the weekly charts for Silver, thus indicating a possibility of sharp wild swings in both directions this week.

Gold

Bias: Neutral

Last Close: Rs 50,280

Pivot Point: Rs 50,350

Upside Targets: Rs 50,900; Rs 52,150

Downside Targets: Rs 48,880; Rs 48,500

After a sharp swing in the last two weeks, the MCX Gold futures were precariously poised near the 20-DMA (Daily Moving Average) placed at Rs 53,050-odd level on the daily chart. 

While, the price-to-moving averages action remained negative, select key momentum oscillators were in neutral zone, thus indicating a possibility of further volatility in prices in the coming trading sessions.

For now, the bears are likely to have the upper hand as long as Gold futures trade below Rs 50,350. On the downside, the Gold prices can slide towards the lower-end of the Bollinger Band, indicating a downside target of Rs 48,500.

Whereas on the other hand, in case, MCX Gold futures are able to sustain and trade consistently above the 50,350-level, a pullback towards the higher-end of the Bollinger Band seems possible, thus indicating an upside target of Rs 52,150.

As per the weekly chart, the MCX Gold October futures are currently testing support around the 50-WMA (Weekly Moving Average), placed at Rs 50,270-level. The near-term resistance is seen at Rs 50,900 (20-WMA), while major support on the downside is seen at Rs 48,880 - 100-WMA.

The price-to-moving averages action on the weekly chart has remained positive despite the alternate bouts of price corrections since early February.

As per the weekly Fibonacci chart, this week MCX Gold October futures may swing in a broad range of Rs 49,350 to Rs 51,215. The contract may seek support around Rs 49,950 - Rs 49,700 - Rs 49,525, and could face resistance around Rs 50,610 - Rs 50,855 - Rs 51,035. 

On Monday, the MCX Gold 1 kg futures contract is likely to seek support around Rs 50,105 - Rs 49,975 - Rs 49,785, while on the upside the October contract may face resistance around Rs 50,455 - Rs 50,585 - Rs 50,775.

Similarly, the MCX Gold Mini October futures may seek support around Rs 49,925 - Rs 49,800 - Rs 49,625, and the contract is likely to face resistance around Rs 50,255 - Rs 50,375 - Rs 50,550 today.

Silver

Bias: Negative

Last Close: Rs 55,290

Targets: Rs 53,685; Rs 52,400 

Resistance: Rs 56,600; Rs 57,700

The short-term bias for the MCX Silver futures has once again turned negative, with not only the price dipping below the 20-DMA, but also a negative divergence on select key momentum oscillators. The bias on the broader time frame too remains bearish for Silver.

In the near term, Silver futures are likely to witness downward pressure as long as the commodity trades below Rs 56,600 - its 50-DMA, above which the next immediate hurdles for Silver is seen at Rs 57,700 and Rs 57,900 - its 100-DMA and 20-DMA, respectively.

On the downside, the Silver December contract seems on course to test the lower-end of the Bollinger Band on the daily chart at Rs 53,685, below which the next significant support is seen around the lower-end of the Bollinger Band on the weekly chart at Rs 52,400-odd level. 

Among the key momentum oscillators, the MACD (Moving Average Convergence and Divergence) is indicating divergent signal on the daily and weekly chart. The bias seems clearly negative on the daily chart, while is positive on the weekly chart. Hence, one can expect some wild swings in the current week.

According to the weekly Fibonacci chart, this week the MCX Silver December futures may swing in a broad range of Rs 52,150 to Rs 58,450. The Silver contract may seek support around Rs 54,170 - Rs 53,350 - Rs 52,745. On the upside, Silver futures are likely to face resistance around Rs 56,400 - Rs 57,230 - Rs 57,850.

On Monday, Silver futures are likely to seek support around Rs 54,715 - Rs 54,300 - Rs 53,680, while on the upside the commodity could face resistance around Rs 55,865 - Rs 56,285 - Rs 56,900.

Similarly, MCX Silver Mini November futures may seek support around Rs 55,315 - Rs 54,910 - Rs 54,325; while the Mini contract could face resistance around Rs 56,810 - Rs 57,100 - Rs 57,400 on Monday.

Further, the MCX Silver Micro November futures could seek support around Rs 55,400 - Rs 55,000 - Rs 54,425 and might face resistance around Rs 56,890 - Rs 57,180 - Rs 57,475 today.