Gold and silver closed the week with a loss. In dollar terms, gold and silver lost 0.2 and 0.4 per cent to close at $1,957.4 and $24.2 per ounce, respectively.

Similarly, on the Multi Commodity Exchange (MCX), gold futures was down 0.8 per cent to end the week at ₹59,354 (per 10 gram). Silver futures declined 1.5 per cent as it closed at ₹72,688 (per kg).

Although both precious metals posted a weekly loss, the recovery towards the end of last week has taken some strength away from the bears.

MCX-Gold (₹59,354)

Gold futures (August series) bounced off the ₹59,000-level on Thursday. The daily candlestick shows a bullish pin bar, potentially indicating a rally from here.

However, the contract faces a series of barriers between ₹59,500 and ₹60,500. So, the trend will turn bullish only if the contract rallies past ₹60,500.

Looking at the price action, irrespective of the recent price movement, the odds are now high for a flat trend between ₹59,000 and ₹60,500.

Trade strategy: Three weeks ago, we suggested going short at ₹59,780 with a stop-loss at ₹61,000. Since the probability of horizontal trend has increased, exit this trade now with a small profit at ₹59,354. Fresh trades can be considered after gold futures show strong signs of a trend on either side.

MCX-Silver (₹72,688)

Silver futures (July contract), which was on a descent for most part of last week, rebounded in the second half of Thursday. Thus, the downtrend has lost traction and the bears can take back the driving seat only if it manages to breach the support at ₹70,000.

That said, there is a resistance at ₹74,000 and until this holds true, we cannot be certain about a rally. Therefore, the next leg of trend can be confirmed only if silver futures breach either ₹70,000 or ₹74,000.

Trade strategy: The contract seems to be stuck within the key levels at ₹70,000 and ₹74,000. So, refrain from trading silver futures until either of these levels are invalidated.

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