Commodities Market Technical Outlook April 08, 2013

Gold witnessed an upward adjustment on Friday to close at $1,580.28 (+$27.74). Currently, gold has formed a higher high and higher low indicating that the recovery is likely to continue. The upside target will be in the range of $1,594-$1,611, where a fall below Friday’s low will cause the downward trend to resume. The RSI and the Stochastic Oscillator have reversed, supporting the above view.

Investors are recommended to go ‘long’ for trading purposes, with risk defined below $1,549. The support and resistance are at $1,566.98 and $1,589.47, respectively.

Following the yellow metal, silver has registered a gain of $0.46 to close at $27.29. The current pattern suggests that silver has made a bottom and recovery is likely. A rise above Friday’s high will open the way towards $28.22 (14-DMA), while a drop below $26.77 (Friday’s low) will cause the downtrend to resume. Meanwhile, the RSI and the Stochastic Oscillator have generated a buy signal, supporting a positive view.  

Investors are recommended to ‘Buy on dips’, keeping stoploss below $26.77. The support and resistance are at $26.93 and $27.50, respectively.