Gold and silver posted a weekly gain following a decline in the dollar. In terms of dollars, gold and silver gained 0.7 and 3 per cent to close the week at $1,960.6 and $24.3 per ounce, respectively.
Similarly, on the Multi Commodity Exchange (MCX), gold futures appreciated 0.4 per cent to end the week at ₹59,821 (per 10 gram). Silver futures was up 2.5 per cent as it closed at ₹73,796 (per kg).
MCX-Gold (₹59,821)
Gold futures (August series) was trading flat through last week. The contract was held in the narrow range of ₹59,400-60,150. Thus, the overall bear trend and the double-top pattern remain valid.
The chances are open for the contract to see a dip to ₹58,000. Support below this level is at ₹56,400, where the 200-day moving average lies. But if there is a recovery from here, gold futures is likely to face resistance at ₹61,000 and ₹62,000.
Trade strategy: We suggested going short two weeks ago at an average price of ₹59,780. Stop-loss was suggested at ₹61,000. Retain this trade.
When the contract touches ₹58,500, tighten the stop-loss to ₹59,500. Book profits at ₹58,050.
MCX-Silver (₹73,796)
Silver futures (July contract), which was flat in the first half of last week, gained positive momentum on Thursday and rallied and posted a gain of 2.5 per cent. Thus, silver futures outperformed gold futures.
From the current level, the nearest resistance region is the price band of ₹74,400 and ₹75,000. The 50-day moving average lies at ₹74,400. Only a rally past ₹75,000 will turn the trend positive. In such a case, there might be a rally towards another resistance band of ₹78,300-78,700.
But if the contract resumes the decline, it might fall to ₹70,000, a support. Subsequent support is at ₹67,300.
Trade strategy: We suggested short positions at an average price of ₹71,615. Stop-loss of this trade at ₹73,200 was hit last week. Although the bears seem to loosen grip, there is no confirmation of a bullish reversal yet. So, stay away until a clear sign occurs.