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Gold ended last week without much change, whereas silver saw a considerable decline in prices. Gold, in terms of dollars, was down by a marginal 0.3 per cent to end the week at $2,011.2 per ounce. The gold futures on the Multi Commodity Exchange (MCX) was up by a marginal 0.4 per cent as it closed at ₹60,887 per 10 gram.
On the other hand, silver, in dollar terms, lost 7 per cent as it ended the week at $23.9 per ounce. Similarly, silver futures on the MCX was down 5.2 per cent for the week as it ,closed at ₹73,054 on Friday.
MCX-Gold (₹60,887)
The June gold futures was trading in a narrow range last week. Nevertheless, the support at ₹59,000 stays true and thus, the overall bullish inclination is retained. That said, the price action on the daily chart hints at a loss in momentum.
In case the contract regains traction and rallies, it can go up to ₹63,000. However, if the price drops and the gold futures slip below ₹59,000, we could see a swift decline to ₹58,000.
Trade strategy: Retain the long position initiated at ₹60,511 as the support at ₹59,000 holds. Add more longs if the price softens to ₹59,600. Place stop-loss at ₹58,800. When the contract touches ₹62,000, tighten the stop-loss to ₹60,500. Book profits at ₹62,800.
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MCX-Silver (₹73,054)
Silver futures made a U-turn and fell below a key support at ₹75,000 last week. Consequently, the price action on the daily chart is resembling a double-top pattern. This means that the silver futures might drop further.
However, there is a strong support at ₹72,000 and until this level holds, the bulls have a chance to turn the tide in their favour. That said, given the prevailing conditions, there is a possibility for silver futures to start consolidating within ₹72,000 and ₹75,000. So, essentially, the next leg of trend can be confirmed only after the contract breaches either of these levels.
Immediate support below ₹72,000 is at ₹70,000. Subsequent support is at ₹67,000. Resistance above ₹75,000 are at ₹78,500 and ₹80,000.
Trade strategy: Stop-loss at ₹73,500 for the longs initiated last week was hit. Stay out now and wait for the contract to get out of the ₹72,000-75,000 range.
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