Precious metals prices slipped last week. Gold ($4,429.80/ounce) and silver ($66.20/ounce) were down 0.6 and 0.2 per cent respectively. Similarly, in the domestic market, gold futures (₹1,52,767/10 gm) lost 2.2 per cent and silver futures (₹2,37,658/kg) was down 2 per cent.
MCX-Gold (₹1,52,767)
Gold futures (Oct) declined last week to mark a low of ₹1,49,665 on Wednesday. But since ₹1,50,000 is a support, where the 50-day moving average and the 61.8 per cent Fibonacci retracement of the recent rally coincides, there was a rebound.
As long as the base at ₹1,50,000 remains valid, the outlook will be positive. So, we expect the rally to resume. In the near-term, gold futures can surpass the prior high of ₹1,64,773 and touch ₹1,67,000.
Instead, if the contract breaches the support at ₹1,50,000, the downswing can extend to ₹1,44,000. Support below ₹1,44,000 is at ₹1,40,000.
Trade strategy: Buy gold futures (Oct) at ₹1,52,700. Place stop-loss at ₹1,49,000. When the contract goes up to ₹1,60,000, revise the stop-loss to ₹1,55,000. Book profits at ₹1,67,000.
MCX-Silver (₹2,37,658)
Silver futures (Dec) fell and made a low of ₹2,31,811 last Wednesday. But it immediately recovered since there was a support at ₹2,32,000. Also, the 50-day moving average lies at ₹2,34,525. Hence, the ₹2,32,000-2,34,525 price region is a support band.
In the forthcoming sessions, we anticipate a rally in silver futures. Although ₹2,45,000 and ₹2,55,000 are resistance levels, the contract can surpass these levels and rise to ₹2,60,000 in the short-term.
On the other hand, if the base at ₹2,32,000 is decisively breached, silver futures can fall to ₹2,25,000. Support below ₹2,25,000 is at ₹2,18,500.
Trade strategy: Buy silver futures (Dec) at ₹2,37,500 and place stop-loss at ₹2,29,000. On a rally to ₹2,50,000, tighten the stop-loss to ₹2,42,000. Book profits at ₹2,60,000.