Selling Recommended In Gold And Silver: Karvy

Weekly Outlook: Overall, we feel gold prices might initially rise during current week while prices might decline from the higher levels. 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
- Gold traded on a flattish note for larger part of trade yesterday though fell smartly in the US hours to close the session in the red both locally and globally

-Gold for most active February expiry at Comex platform hit a high of around $1244 per ounce though closed lower by 0.7% to $1230 per ounce

-Dollar jumped sharply post the release of the US trade balance reading which showed healthy contraction in the deficit figure from $40 Bln last month to near $34 Bln both gold and silver for the day.

Global Market Analysis
It was a dollar play story over night when trade deficit unexpectedly narrowed. The USD index rose to 80.9. The impact was mainly felt on bullion sector wherein it shaded from its intraday high. We had talked about $1253 as a strong resistance for gold while it made a high of $1247.70 and this morning it is trading at $1227. Likewise, silver prices too have declined sharply and currently trading at $19.72. For both gold and silver we now have to change our stance on sell side as expected in our weekly report ahead of US jobs data.

Today we have the ADP employment change number from US and likely that private payrolls may increase by another 200K while it had increased by 215K in the month of November. We believe some kind of response is already felt yesterday and the same scenario may live today. So, we suggest selling both gold and silver for the day.

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 broadly followed the movement in the yellow metal though the drop in the commodity was severe as the commodity being a high beta one

-At the end of trade, silver for March expiry at Comex was lower by 1.6% to $19.78 per ounce whereas in India we saw a bigger drop as local prices also took note of Rupee’s appreciation especially the NDF market in evening