Posted By : Kishore B.S
Precious Metals Outlook for the week:
Gold made the upmove last week as said to the target level of 29100, and with this upmove now it remains to be watched whether the upmove would further continue after breaching the earlier resistance zone of 29280- 29400 levels which has been the current all time highs for the commodity.
The charts are indicating that the upmove momentum has been strong and has chances of sustaining for another session or two and if the resistance zone is breached could trigger upmove due to the reversal of the trend.
Given the global scenario the higher price could act as a deterrent and could trigger some downtrend and profit booking to 29000-28600 levels. But if uncertainty about the Economic recovery and another round of QE is announced could trigger further rally to 30000-30900 levels.
Silver has been decoupling when compared to GOLD and has been on the downward trend drifting lower slowly and steadily. The downward trend has been the sloping channel as indicated in the chart above wherein the commodity has been drifting down every time it hits the upper resistance line.
Given the pattern it is suggesting that the downtrend is likely to continue unless the resistance is broken and the commodity holds out above the 56400 mark for the time being.
If not there are more chances of the commodity to dip to 53600 levels which is the support level of the downward channel.
(Inputs Mr. Hemanth .V, Faculty TA, Stock Market Institute, Bangalore)