Price of precious metals slipped last week. Gold ($4,165.40/ounce) and silver ($57/ounce) lost 0.7 and 6.3 per cent respectively. In the domestic market, gold futures (₹1,47,918/10 gm) dropped 2.4 per cent whereas silver futures (₹2,11,187/kg) declined 6.5 per cent.
MCX-Gold (₹1,47,918)
Gold (Dec) futures fell and breached the support at ₹1,48,000 last week. Although the contract saw some recovery in the last two sessions, it could not reclaim ₹1,48,000.
That said, the contract can still move up, possibly to ₹1,50,000. However, a recovery beyond this price point is less likely. For the outlook to change positive, the price should rise above ₹1,51,700.
As it stands, the probability for a further fall is high. The nearest support is at ₹1,43,500 followed by ₹1,41,000.
Strategy: Short if the price rises to ₹1,50,000. Target and stop-loss can be ₹1,43,500 and ₹1,52,000, respectively.
But if the contract falls below ₹1,46,500 without a rise in price, initiate short trade with a stop-loss at ₹1,48,000. Exit at ₹1,43,500.
MCX-Silver (₹2,11,187)
Silver (Dec) futures breached an important support at ₹2,19,000 last week and marked a low of ₹2,07,971 on Wednesday. While the contract recovered from the low, the price action shows considerable downward bias.
We anticipate further decline, either from the current level of ₹2,11,187 itself or after a corrective rally to ₹2,17,000. The contract can drop to the potential support band of ₹2,00,000-2,00,750.
For the outlook to turn bullish, silver futures should break out of ₹2,28,000-2,30,000 resistance band.
Strategy: Sell if the contract inches up to ₹2,17,000. Target and stop-loss can be ₹2,00,750 and ₹2,22,000, respectively.
Instead, if silver futures slips below ₹2,10,000, initiate fresh short with a stop-loss at ₹2,15,000. Book profits at ₹2,00,750.