Bullion Weekly Technical Outlook and Analysis of Commodity Advisory Services

Gold June futures at the COMEX platform traded higher in the last week by 1.00+% while in India it surged over 1.80%. Our Commodity Advisory Services noticed more gains in the prices due to Indian rupee depreciation. However, the major reason for price rise at the global front is the minutes of Feds previous meeting which was released on Wednesday wherein the discussion was mostly unto keeping the interest rate unchanged. We believe this has been the major driver for the commodity to trade higher while the other fundamentals remained bearish for the commodity. If we look at the investment demand at the SPDR gold trust the holdings remained muted at 806 tons. The another reason for the commodity to trade higher was the falling US dollar which declined over 1% in a single week while the euro currency also traded higher may have added support to the yellow metal to trade higher. Along with this, precious metals group (PGMs) also traded higher modestly which supported the commodity to trade higher. At the domestic front the spot demand remained more or less same that of previous week which supported gold to trade higher. Asian demand has been quiet for more than a month at this instant, with top purchaser China on the tangential due to a drop in the Yuan currency against the US dollar. As we proceed to the next week we believe the USD index trading down effect may reduce. The data expected in the next week from the US are mostly expected to be better for the economy (detailed explained in our weekly in-house economic report). Therefore, the rise in gold that is being noticed in the last week might fade. Hence, we believe that the gold commodity might turn into negative next week. We advice to sell the commodity from higher levels. On the other hand, political tension that is still mounting has increased risk after Russian President Vladimir Putin warned gas supplies to Europe could be disrupted if Moscow cuts the flow to Ukraine over unpaid bills. In this regard the geo-political concern might ruin our forecasted bearish view on gold. Nonetheless, we believe gold prices in the next week may initial rise a tad but eventually turn lower. Hence, as explained above we recommend selling the commodity from higher levels. Looking at the above scenario we believe gold commodity may fade its last two weeks gain and turn bearish. Hence, we are recommending sell for the metal. Also, we believe that silver may

continue to remain underperformed to therefore, we recommend selling silver and buying gold future contract as part of a ratio strategy for the next week. Gold June MCX futures prices traded higher in the last week. As of 11 April, 2014 prices are trading at 28760, up by 1.7% from the previous week close. In the weekly chart a strong resistance is seen at 29141(previous high), which is expected to limit the upside move. According to Fibonacci principle, stiff resistance is seen at 29103 (50% retracement of the range 30421-27770). Sustained trades below the same it is possible to resume downtrend. Prices are hovering below the weekly exponential moving averages (8, 13 & 21), which is also a supportive factor for downside view Silver Mcx May similar to gold had positive performance for most part of last week last though it gave away almost all of its uptick towards the end of the week to close a tad higher near the $20 per ounce mark. While we had a selling stance into silver commodity last week, we were proved wrong during the middle sessions as comments from the FED minutes created markets expectations that interest rates in the US might not be raised earlier, as been feared by the markets. However, while prices went against our view we had a better outlook as per the ratio strategy was concerned. We were expecting the commodity to underperform the yellow metal as lower demand scenario in China which is the worlds largest silver consumer had been underperforming the broader markets lately. We recommend buying the ratio this week on dips for targets towards 65.60-66 which it touched during middle session of the week. While broader factor continue to remain similar, we are expecting the gains during the current week in the Bullion complex to fade. We are suggesting a selling bias in the commodity as we feel the underperformance in silver particularly in current week when base metals had recorded very smart returns tells about the inherent weakness in the commodity. This week two of the top-five metals rose around 4% while all manage to finish in the green and still silver retuned lower than gold. With the investment related cues stable to subdued for the commodity, it might take the sector related cues over Dollar Index, trend in equities and most importantly gold. Overall we are maintaining a selling view in the commodity next week while expect the ratio i.e. buying gold and selling silver to continue increase. Since we have a truncated trading session, buying the ratio on dips would be advised for small targets towards 66.50-67 mark Silver MCX May futures prices are seen trading sideways in the last week. In the weekly chart prices are witnessing a strong resistance at 44000 which is expected to limit the upside move. Technical indicators like weekly exponential moving averages (8, 13 & 21) and weekly relative strength index (14) both are supportive of downside view. For short term traders we suggest selling at higher levels. Commodity Advisory Services Tips Gold Mcx June Sell Near 28960 sl 29350 Tgt 28550-28300 Silver Mcx May Sell Near 43900 sl 45000 Tgt 42500-42000 Crude Mcx Apr Buy Near 6240 sl 6130 Tgt 6340-6420