Gold fared better than silver last week. The yellow metal even gained marginally in terms of dollars despite the greenback rallying considerably recently. Gold, in dollar terms, was up 0.4 per cent last week as it ended at $1,962 per ounce on Friday, whereas silver lost 1.2 per cent to close the week at $24.6 an ounce.
On the Multi Commodity Exchange (MCX), gold futures ended almost flat at ₹59,309 per 10 gram. Silver futures, on the other hand, was down 1.3 per cent and it closed at ₹74,970 per kg.
MCX-Gold (₹59,309)
Gold futures (August series) marked an intra-week high of ₹59,984 on Thursday before seeing a decline to ₹59,309. Since the contract closed above the 50-day moving average on Tuesday, the trend has become bullish. Thus, the fall towards the end of last week is likely to be a corrective one.
We expect the contract to regain momentum and rally towards ₹62,000 in the near term. The nearest support is at ₹58,800 and ₹58,000. A fall below ₹58,800 this week is less likely.
Trade strategy: The rally last week above ₹59,600 means an exit of shorts and initiation of fresh longs with a stop-loss at ₹58,600. Retain this trade.
Going ahead, when the contract rallies past ₹60,500, modify the stop-loss to ₹59,800. Further tighten the stop-loss to ₹61,000 when the price touches ₹61,500. Exit the longs at ₹61,800.
MCX-Silver (₹74,970)
Silver futures (September contract), which rallied till mid-week, made a U-turn, and fell sharply in the last two sessions. However, the contract retains the bullish inclination.
The price band of ₹74,500-74,800 is a support band. As it stands, the likelihood of a bounce off this price region looks high. In such a case, we might witness silver futures travelling upward to ₹77,500 and ₹79,000, the nearest resistances.
But if the contract slips below ₹74,500, it could find support at ₹73,500 and ₹72,500.
Trade strategy: Buy silver futures now and on a dip to ₹74,500. Place stop-loss at ₹73,300. When the contract touches ₹77,500, tighten the stop-loss to ₹75,800. Book profits at ₹78,800.