Gold, in terms of dollars, was down 0.5 per cent last week as it closed at $2,735 per ounce on Friday. Silver lost 3.9 per cent and ended the week at $32.4 an ounce.
In the domestic market, gold futures (₹78,867 per 10 gm) was up 0.4 per cent and silver futures (₹95,483 per kg) depreciated 1.7 per cent.
MCX-Gold (₹78,867)
Gold futures (December) extended the rally and hit a record high of ₹79,775 on Wednesday. However, there was a sharp fall on Thursday before a marginal recovery on Friday.
As it stands, the uptrend is intact. But ₹80,000 is a potential resistance, which can trigger a corrective decline. In case there is a downward movement, gold futures can find support at ₹77,400 and ₹76,500. Only a breach of the base at ₹75,000 can turn the trend bearish.
On the other hand, if gold futures break out of ₹80,000 it can open the door for a rally to ₹85,000, which can even extend to ₹88,000.
Trade strategy: Stay out. Buy gold futures if it surpasses ₹80,000. Target and stop-loss can be ₹77,800 and ₹85,000 respectively.
MCX-Silver (₹95,483)
Silver futures, after hitting the important resistance at ₹1,00,000 nearly a fortnight ago, saw a decline in price. Currently hovering around ₹95,500, it remains above the support band of ₹93,500-94,300.
If the bears drag the contract below ₹93,500, the downswing can extend to ₹88,000. In case silver futures rally from the current level, there is a strong barrier at ₹1,00,000. Only a breakout of this can lead to a fresh leg of uptrend.
Potential resistance above ₹1,00,000 are at ₹1,05,000 and ₹1,10,000.
Trade strategy: As the trend looks uncertain going ahead, stay on the sidelines for now. Buy silver futures if it breaks out of ₹1,00,000. Target and stop-loss can be ₹1,05,000 and ₹97,800 respectively.