Gold ($2,702/ounce) advanced 0.4 per cent whereas silver ($30.3/ounce) was down 0.3 per cent last week.

In the domestic market, gold futures (₹79,023/10 gm) was up 0.8 per cent and silver futures (₹91,602/kg) lost 1 per cent.

MCX-Gold (₹79,023)

Gold futures (February) extended the upside to mark an intraweek high of ₹79,270 before wrapping up the week a little lower.

While the contract is currently hovering around ₹79,000, a resistance, given the momentum, it is likely that it can rise to ₹80,200 soon. A breakout of this can lift it to ₹81,000.

But if the contract drops from the current level, it can find support at ₹78,000 and ₹77,500, its 20-day moving average.

Note that so long as the support at ₹75,000 holds, the broader bias will remain bullish.

Trade strategy: We had suggested buying gold futures at ₹76,800 two weeks back. Hold on to this position. But move the stop-loss higher from ₹76,800 to ₹77,800. Book profits at ₹80,000.

MCX-Silver (₹91,602)

Silver futures (March) saw its price decline on Monday. However, the support at ₹90,000 arrested the fall. Also, the 20-day moving average coincides at ₹90,000, making it a strong base.

Although the contract recovered, it was unable to get past the resistance at ₹93,600. That said, the trend has not turned bearish and there is a good chance for silver futures to break out of ₹93,600 and rally to ₹96,500. A breach of this can take the price higher to ₹1,02,500.

The bullish bias will be negated only if the contract breaks below the support at ₹90,000. Subsequent support levels are at ₹86,800 and ₹85,000. 

Trade strategy: Retain silver futures long initiated at ₹91,000. Target and stop-loss can be ₹96,500 and ₹88,500 respectively.

Related Topics