CPI and WPI Numbers and Commodity Tips

Gold commodity has been rising continuously since beginning of the year 2014 from $1200 to $1355 so at any point in time prices may take a smart downward correction. Nonetheless, we need to be very cautious is developing a view for the next week. Looking at the economic data, we have very conventional releases from the US and euro-zone and expecting them to be remain mostly in line with the expectation. In this regard price action could be lower. Coming to trade front, at the COMEX front though prices are trading in a confined range but the volumes have been much higher in last three week in comparisons to previous period. This indicates that there could be a huge price movement in the next week. As stated above we are little cynical about t he views so adding a little technical study to our views we believe if gold fails to above $1360 then prices may drift down to $1320 and then $1300. Likewise, at the MCX platform prices have fallen a tad but the both volumes and open interests have increased substantially indicating that the commodity may decline a tad in the early part of next week. Therefore, we suggest a sell view on gold commodity while preferring to be cautious on the trade. Gold April MCX futures prices initially made a weekly high of 30660 and later started declining. In the weekly chart prices are hovering in the trend channel and expected to continue the same trend. Strong resistance is seen at 30520 levels (trend channel), which is expected to limit the upside move. Immediate support is seen at 29881(previous week low). Break below 29881 could lead the drop towards 29580 levels. For short term traders we suggest selling. Gold Weekly Support on Downside at 29800-29300 Gold Weekly Resistance on Upside at 30500-31000 Trend: Sideways Silver overall we feel, broader part of the view for the commodity continues to be on the weaker side of the trade. While other cues with regards to the institutional investment side have been pretty stable, we feel the commodity would continue to take negative cues with regards movement in base metals. We have seen a huge drop into the commodity mainly on Friday evening (IST) after the US non-farm payrolls data which showed a better than expected increase in monthly payrolls. This pressed both gold and silver lower, though silver owing to its higher beta recorded a very high fall and the ratio also inched higher to 64 marks. We feel next week there is further chance for this ratio to inch higher though post the sudden rise this week, traders are advised to initiate the spread on small declines Onto the commodity also, we have a selling view and would recommend traders to look for short positions in the next week. Locally, we feel there are decent set of cues particularly the CPI and WPI number which are expected to continue show improvement and could lead to some appreciation extending into the Rupee, which is another factor which is likely to add to the weight into the commodity in Indian MCX markets Silver May MCX futures prices continued its downside journey in the last week. As Prices are hovering below the weekly exponential moving averages (8, 13 & 21), which is signaling downside pressure to

remain intact. We might see a higher correction before resuming its downtrend. Key resistance level to watch is at 46900 levels, which is expected to hold the downside view. Downside potential is seen until 45300 levels. Break below 45300 will confirm short term downtrend. Silver Weekly Support on Downside at 45500-44500 Silver Weekly Resistance on Upside at 47100-48000 Trend: Down Commodity Tips SILVER MCX MAY NEAR 46800-46900 SL 48000 TGT 45800-45200 COPPER MCX APR SELL NEAR 430-432 SL 441 TGT 415-410 CRUDE OIL MCX MAR NEAR 6400-6450 SL 6550 TGT 6100-6050