Gold was flat last week, whereas silver declined. In dollar terms, gold ended at $1,959.2 per ounce without much change on a weekly basis. On the other hand, silver lost 1.2 per cent and ended at $24.3 per ounce.
On the Multi Commodity Exchange (MCX), gold futures ended almost flat at ₹59,785 per 10 gram. Silver futures, on the other hand, was down 1.2 per cent and it closed at ₹74,059 per kg.
MCX-Gold (₹59,785)
Gold futures (October series) appear to be forming a sideways range. It could possibly stay within ₹59,300 and ₹60,320. Nevertheless, the bias is bullish and the probability of the contract breaking out of ₹60,320 is higher compared with the probability of it falling below ₹59,300.
A breach of ₹60,320 can lift the contract to ₹62,000 – a resistance. Subsequent barrier is at ₹63,000. Alternatively, if the contract falls below the support at ₹59,300, it could extend the downswing to ₹58,850 or even to ₹58,000.
Trade strategy: We suggested going long at ₹59,600 with stop-loss at ₹58,600 in August contract. Since it is set to expire on August 4, we recommend rolling over the longs to October futures which closed at ₹59,785 last week.
Accordingly, revise the target and stop-loss from ₹61,800 and ₹58,600 to ₹62,000 and ₹58,850 respectively.
MCX-Silver (₹74,059)
The sharp fall on Thursday led the silver futures (September contract) to post a weekly loss of 1.2 per cent. However, the contract stays above a key support of ₹72,500 and could resume the upswing.
While ₹76,700 is the nearest notable resistance, the contract could surpass this level and touch ₹79,000 in the near term. On the other hand, if the silver futures break below the support at ₹72,500, it can decline to ₹71,180 or possibly to ₹70,000.
Trade strategy: The stop-loss at ₹73,300 for the buy we suggested last week was hit as the silver future made an intra-week low of ₹73,250.
That said, the trend is bullish and so, we advise initiating fresh longs at the current level of ₹74,059. Target and stop-loss can be at ₹78,800 and ₹72,000 respectively.