Gold: Buy at 28720-28750

At the local market, Rs 29,371 continues to be a strong resistance and unless that is cleared, we shall not turn completely bullish on gold. Therefore we insist our traders take Weekly positions on gold for mini-trades rather than mega lots in both the direction of trade.

MCX February Call: Buy at 28720-28750 TP 29250 SL 28480 & Sell at 29300-29350 TP 28840/28650 SL 29700

Daily Review
--Bullion saw a ranged session for larger part for trade yesterday wherein Gold prices for most active February contract added 0.3% to $1229 per ounce. Markets saw a small range of near $8 for the whole day.

--In the Indian markets, we saw gold prices adding 0.23% to Rs 28860 per 10/Gms with modest underperformance due to the Rupee’s appreciation.

--Traders awaited major cues from the US Jobs data today evening and that could be reason behind such tight trade yesterday. Moderate pull-back could be a result of some shorts getting covered after strong selling a day before.

Global market analysis: On conventional cues, US equities finished on a mixed to marginally weak note while of Asia is also following similar cues today morning. In currencies, the US Dollar came down a bit from highs and currently hovering at 80.90 whereas Euro is trading near 1.3610 mark. In Bullion, Gold and silver prices saw some pull-back yesterday and are seeing marginal gains in early session today to $1233 and $19.65 per ounce. Today the key would be the Non-farm payrolls which are likely to show extended positivism and could weigh trade in the bullion complex. While the US data is expected to be positive, chart are suggesting a possibility of a move in either direction hence we are holding a cautions view in particularly gold. We have a host of data from UK and also some other releases from US however, the critical reading would continue to be US Jobs. For silver, traders can look for selling for small targets as the commodity is also likely to take cues out of weakness in base metals.

Silver
Weekly Outlook: We believe the commodity is likely to continue to depict similar trend as seen in gold though the undertone for the commodity continues to be bearish. We feel initially silver prices may advance while in the later part prices may correct along with gold. Also any further sell off in equity markets may help silver prices to fall more than gold. Overall we have a ranged view into the commodity for a full week basis.

MCX March Call: Trading range 43550-46025

Review

--Silver prices gained in yesterday’s session along with gold though the gains in silver were better than the former. At the time of closing, silver for most active March expiry contract advanced 0.75% to $19.68 per ounce.

--In the Indian markets we saw silver prices at MCX moving higher by 0.6% to Rs 44125 with lower gains locally led by modest appreciation in the Indian Rupee against the USD.

-- As also stated above, one of the reasons behind the moderate gains in bullion could be weaker equity indices in the US and also marginal fall in the US Dollar from its highs.

Outlook
Prices added yesterday though looking at the major cues as per US economy is concerned, we could see fresh round of negativism coming into the Bullion basket. Overall while we are holding a cautious approach as per as the yellow metal is concerned, we feel silver could see better performance on the negative side as it also takes cues out of the weakness in the Base metals complex.

We advised traders to avoid the strategy call between Gold and Silver yesterday; though we feel they can look for taking the call in Intra-day by selling silver mini and buying gold mini contracts as positive data could fuel fresh selling in bullion. Traders should remember that risk and volatility could be on the higher side today.