Market Update April 09, 2013

Gold showed negative movement on Monday to close at $1,571.89, down $8.39. Despite a negative closing, gold has registered a higher high and higher low suggesting a potential for upside. A rise above yesterday’s high will deliver gains in the range of $1,592-$1,611, while a fall below Friday’s low ($1,549) will cause the downward trend to resume. Meanwhile, the indicators are mixed, signaling a neutral view.

Investors are recommended to stay ‘long’ above $1,549. The support and resistance are at $1,565.21 and $1,580.58, respectively.

Silver traded in a range of $0.29 and closed at $27.25, down $0.04. The current formation (higher high and higher low) suggests that the recovery is likely to continue with an initial target of $28.11 (14-DMA). However, a drop below $26.62 will cause the downward trend to resume. Meanwhile, the RSI has become flat and the Stochastic Oscillator has continued to rise, supporting a neutral to positive view.

We recommend investors to view any downside as an opportunity to ‘Buy’, with risk defined below $26.62. The support and resistance are at $26.98 and $27.56, respectively.