Gold is seen trading at $1325 up by $7 from its previous close. We believe the gains that are noticed today are basically the extension of last week’s bullish move. Also, the declining US dollar is helping gold to trade strong. However, as the day progresses we could see trading participation to come down as the US COMEX is shut today while there are no economic data expected. At the domestic front gold prices may remain marginally volatile today due to Indian rupee fluctuation ahead of interim budget.
Since the international spot gold is trading higher we could see a gap up at the local market. Hence, we recommend buying gold futures contract at from higher levels while the target potential is minimal
Global Market Analysis: Japan’s economy grew less than expected in the fourth quarter of last year. The 0.3% expansion in the October-December quarter was well below the estimate for a 0.7%. Asian equities are trading modestly higher this morning while commodities are trading higher with a good pace. Since the US is closed today due to president’s day holiday we could see good amount of volatility during Asian and the European session. As of now gold and silver spot are trading at $1326 and $21.82 up by 0.62% and 1.61% respectively. We believe market may show sluggish to slightly higher trading today as the US COMEX is off and the electronic session will remain open with thin participation. There are no major economic data expected today. Lastly at the domestic front, the gains in commodities could be slightly lesser than the global market due to currency appreciation. Locally, we also have the government’s Vote of Account (Pre-election budget) which could press some volatility in the Rupee Intra-day. Our advice to all traders’ would be to take full advantage during Asia and European session.
Silver is trading at $21.80 up by 1.72%. So we may expect a good amount of gap up opening at the local market. Since the Asian equities are up, the gold commodity is trading higher, metals have surged and the USD index is also which cumulatively helped the silver to trade higher. Therefore, silver this morning has outperformed gold. So at the opening of the market the gold-silver ratio might get disturbed and believe that the ratio to maintain at the same pace today as silver is likely to remain outperformed to gold. For the day we suggest buying silver from lower levels while the target potential could be minimal.
However, we wish to notify in advance that since silver has outperformed gold in the recent past possibly silver commodity might retract the ratio might also change its direction. Hence, our 2-3 days strategy would be to sell silver and buy gold.
BUY GOLD MCX APR BETWEEN 29300-29275 SL 29200 TGT 29400-29500
BUY CRUDE OIL MCX FEB NEAR 6200 SL 6155 TGT 6245-6260