Beginning of May month showed downward pressure for all commodities, which was extended in June month when gold on MCX suffered a significant sell-off, closing at Rs 58196 per ten grammes, a drop of more than 10%, or Rs 6250.
Silver fell 13.88 percent (Rs 10,950) and concluded at Rs 67,950 per kg. In the international spot market, gold closed at $1925 per ounce, down 8%, while silver fell 16% to $22.30 per ounce. The last week of April saw the gathering of economic data, which influenced the Dollar Index starting on May 1st. Other headwinds erupted on June 14 after the US Federal Reserve paused interest rates after ten consecutive increases. A hawkish outlook by major central banks acts as a headwind for the commodity.
On the technical front, the US Dollar Index (DXY) flattened and the combination of the prolonged overbought levels on the Stochastic oscillator and the closing below the upper band of the Bollinger bands could indicate that there is a minor correction upcoming in the following sessions before resuming the further bullish momentum. To analyze overbought or oversold conditions, momentum shifts, and probable divergences between price and indicator movements, we used the Relative Strength Index (RSI) or the Moving Average Convergence Divergence (MACD).
Gold and silver, on the other hand, are near multi-month lows. The sellers' strengths are reflected in the four-hour chart. At the time, technical indicators show firm negative slopes near oversold readings. Applying Fibonacci levels to find extensions of existing trends that are based on the Fibonacci sequence. These levels can serve as regions of interest for price reversals likelyin Gold at 57,700 and Silver at 66,200, starting from 23 Jun, Friday session onwards, view also valid in upcoming contracts.
Buy Gold 57700- 57500 SL 56900 TGT 59600- 59800
Buy Silver 66200- 65900 SL 64000 TGT 69500- 69900