Gold, Silver trading strategy: Technicals explained by CapitalVia Investment Adviser

International Gold and Silver prices are trading with losses owing to stronger U.S. Treasury Yields and U.S. dollars. Rumors of lockdowns across Europe have taken a toll on the pace of economic recovery which could cap the downwards move. Technically, International Gold is trading with bearish momentum and breached the psychological levels of $1700. Support is at $1680-$1685 levels, which could be tested in the upcoming sessions. On the domestic front, MCX Gold June gave a gap down opening and has been sustaining below 50- SMA. Prices have been choppy since this morning. CapitalVia Investment Adviser could expect bears to dominate in the upcoming session, where Rs 44000 levels could provide a support to the prices.

International Silver also traded with bearish momentum and tested the support of $24.60-$24.40 levels in the morning session. MCX Silver May opened on a negative note and has traded in a sideways range of Rs 64200 – Rs 63600 in the morning session. Support is at Rs 63700 – Rs 63400 levels. Domestic prices did not decline like their international counterparts owing to weakened INR against USD. If USD/INR continues to trade with gains in the upcoming sessions, then we may witness a rise in the prices of Bullion metals.

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HDFC Securities says that the unblocking of the Suez Canal and expected unveiling of an infrastructure plan from US President Biden buoyed sentiments on the street. HDFC Securities markets reacted very favorably to the positive global cues and surged. The Nifty gained 338 points or 2.33% to close at 14845. The breadth of the markets was evenly balanced and broader indices like Midcap and small-cap index underperformed the Nifty.
 
BSE IT, Metal, Healthcare and FMCG indices took the lead. Major Asian and European markets had a positive session while select few like Taiwan’s weighted index and Germany’s Dax index surged to fresh all-time highs. The Dow Jones Futures are also trading higher at fresh all-time highs, indicating a positive start in US markets today.
 
Technically, with the Nifty surging higher and closing above the crucial 20-day SMA, the bulls seem to have an upper hand in the short term