Precious metals saw their prices drop last week, which has not been the norm in recent months. Gold, in terms of dollars, was down 1.9 per cent and it closed at $2,684 per ounce. Silver lost 3.4 per cent and ended the week at $31.3 an ounce.

In the domestic market, gold futures (₹77,272 per 10 gm) lost 2 per cent and silver futures (₹91,269 per kg) declined 4.4 per cent.

MCX-Gold (₹77,272)

Gold futures (December) retain the broader bullish bias despite the fall in price over the last week. Nevertheless, ₹80,000, a potential resistance, is the challenge ahead for the bulls.

If the contract resumes the uptrend and surpasses ₹80,000, it will open the door for a rally to ₹85,000. The upside can extend up to ₹88,000.

In case the contract continues the downward move, there are supports at ₹76,500 and ₹75,000 which can help in arresting the decline.

 Trade strategy: Go long if the price dips to ₹75,500 with a stop-loss at ₹73,500. When the contract rises past ₹80,000, revise the stop-loss to ₹77,800. Exit at ₹85,000. In case the contract rallies past ₹80,000 without a decline to ₹75,500, initiate buy. Target and stop-loss can be ₹77,800 and ₹85,000 respectively.

MCX-Silver (₹91,269)

Silver futures look set to see a further drop in price, potentially to ₹88,000, a support. If it can rebound, we can see a fresh leg of uptrend to ₹96,600 or even to ₹1,00,000.

But if the support at ₹88,000 is breached, the outlook can turn negative. In such a case, the contract can fall to ₹85,000 and to ₹83,000.

Trade strategy: Buy if silver futures dip to ₹88,300. Keep stop-loss at ₹86,800. When the price recovers to ₹94,000, modify the stop-loss to ₹91,500. Exit the longs at ₹96,000.

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