Gold and silver had a contrasting week. The former depreciated, whereas the latter gained. In terms of dollars, gold lost 1.2 per cent whereas silver went up 0.4 per cent to end at $1,889 and $22.8 per ounce, respectively.
On the Multi Commodity Exchange (MCX), gold futures was down 0.9 per cent as it closed the week at ₹58,375 per 10 gram. Silver futures appreciated 0.4 per cent to end at ₹70,235 per kg.
MCX-Gold (₹58,375)
Gold futures (October series) fell last week and closed below the 200-day moving average (DMA). This has strengthened the bears and the likelihood to see more fall is high.
That said, there is a chance for the contract to see a minor rally from here, possibly to ₹59,000, before falling further. We anticipate the downtrend to extend below ₹58,000 where gold futures could touch ₹57,000.
Trade strategy: Initiate fresh short position on gold futures now at around ₹58,375 and add shorts in case the price rises to ₹59,000. Place stop-loss at ₹59,500.
When the contract slips below ₹58,000, tighten the stop-loss to ₹58,600. Further tighten the stop-loss to ₹58,000 when gold futures touch ₹57,500. Exit at ₹57,200.
MCX-Silver (₹70,235)
Silver futures (September contract) saw a limited decline as it has a support between ₹69,500 and ₹70,000. That said, the contract did not rally and was moving sideways.
The broader bearish bias still exists and only a breakout of ₹72,500 will turn the trend bullish. We expect the contract to see a minor rally to ₹71,800 and then resume the downtrend.
In such a case, silver futures is likely to slip below ₹69,500 and move down to ₹65,000.
Trade strategy: Given the above conditions, traders can stay away for now. Sell silver futures with a stop-loss at ₹73,000 if the price rallies to ₹71,800. Book profits at ₹69,500.
If the contract breaks below ₹69,500, either from the current level or after a rally to ₹71,800, go short afresh. Target and stop-loss can be at ₹65,000 and ₹71,800 respectively.
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.