Here's how you should play bullion ahead on Fed meet

In an interview to CNBC-TV18, Kishore Narne, Associate Director, Head - Commodity & Currency at Motilal Oswal Commodity Broker Pvt Ltd shared outlook and trading strategy for gold and silver.

Below is a verbatim transcript of the interview: Q: Gold has been in a range, do you think it is running to resistance internationally above USD 1,350 per ounce? A: At USD 1,340 per ounce there is a significant resistance. The market should be waiting now for the Fed statement to come out and typically that should be the deciding factor whether it would breach that USD 1,340-1,350 per ounce level or it should come down from there. So, if the Fed comes out and says that yes, we are going to keep the liquidity for some time more and it should be more dovish statement then probably you will have a significantly weaker dollar and the stronger gold. However, if the Fed somehow signifies that could be a possible tightening somewhere down the line September where most of the buyers believe that the tapering should start, the gold should take a beating. So at this point of time, I am suggesting to sell gold intraday at around Rs 27,600 -27,650 per 10gm levels and the stop loss of Rs 27,750 per 10gm and a target for Rs 27,500-27,450 per 10gm levels. Q: What is going on with silver? A: Silver has a mild upside during the day but one should be looking to sell at around Rs 41,200 per kilogram levels with stop losses of around Rs 41,550 per kilogram for the day. Look for targets close to Rs 40,600 per kilogram. Fed is going to be a deciding factor here overall both on the currency front as well as on precious metals front. Q: What about crude? A: Crude is something which is going through a kind of a corrective phase at this point of time. Though I am not seeing a trend reversal at this point of time, there is some more weakness coming up. I am suggesting to sell crude at around Rs 6,200 per barrel levels on domestic markets with Rs 6,350 per barrel as a stop loss and probably Rs 6,100-6,080 per barrel kind of a target but may not be an intraday – maybe a couple of days should be a weakness in crude.