Gold and Zinc Trading Strategies by Tradebulls Securities
Gold futures closed slightly higher on Tuesday due to the weaker US dollar. Sentiment for gold had clearly deteriorated as gold experienced its first quarterly decline in more than two years. Gold rebounded from its nine-month low on Friday as the US dollar began to retreat after the unveiling of President Joe Biden’s $ 2.25 billion stimulus package that would be funded by an increase in the dollar. ‘Corporation tax. Looking back, gold prices held up relatively well despite the bearish sentiment, as it once again rose above $ 1,700 in COMEX. From a contrarian point of view, gold has a pretty good configuration because no one wants to own gold anymore. Although the increase in Covid-19 cases has created some bump, but the global economy is on the road to recovery and therefore we believe gold is near bottom as no one is interested in owning anymore gold. Gold has shown resilient strength despite negative headlines and strong headwinds like rising US bond yields, record stock market valuations and improving economy. We believe the recent MCX’s 44,200 low is the near-term low and gold should trade steadily higher from here on out. The buy-on-dip strategy should be used and we expect gold to test 46,500-46,500 in a week.
The short-term technical outlook for silver has changed recently after the weakening US dollar. The next bullish price target for Silver Bulls is to close the price above technical resistance at $ 26 an ounce. The good thing is that the money is back to the $ 25 mark and should now be targeting $ 26. US bond yields and the US dollar are on the decline and given silver’s historically negative correlation with USD and bond yields, we would expect silver to push further towards Rs.66,900. Now money support is 64,800 in MCX.
Crude oil is trying to find a base after a sharp fall, as increasing OPEC + supply and higher Iranian production countered signs of a strong economic rebound in the United States. Now there is another wild card in the form of Iran’s return to the market. Although the sanctions against Iran will not be lifted until after the talks are concluded, so in the short term, Iran returning to the market will not be affected by the market. Crude needs to cross 4,500 for bullish momentum and is stuck in a range of 4,300 to 4,500.
We continue to see more downward pressure as it is likely that natural gas markets will suffer from lack of demand as we move towards warmer temperatures. The oversupply and the lack of demand make it a perfect selling opportunity every time it rallies. Any bounce up to 188 would be a perfect setup to bypass natural gas. Warmer-than-normal weather is expected to cover most of the United States over the next 6-10 and 8-14 days, according to the National Oceanic Atmospheric Administration.
Buy Zinc | TGT: 232 | Stoploss: 218
Zinc broke out of the 222-217 range with volumes. The range breakout as well as the volume confirm the bullish breakout. The RSI is above 50 and the moving average of 20 and 50 also gave a buy cross, so we are bullish on Zinc and recommend a long position with a target of 232 and a stoploss of 218.
Buy gold around 45,800 | TGT: 46,800 | Stoploss: 45,500
Gold double bottomed around 44,150 and rebounded strongly. In the COMEX, it moved back above $ 1,700 and in the MCX, prices exceeded their 50-DMA, confirming the ongoing uptrend. There is no divergence in the RSI on a daily scale, with the RSI trading around 60. We recommend long positions near 45,800 with an expected target of 46,800 and a stoploss of 45,500.
Disclaimer: Bhavik Patel is Senior Technical Analyst (Currencies / Commodities) at Tradebulls Securities. Opinions are personal.