Gold ($2,985/ounce) and silver ($33.8/ounce) appreciated 2.6 per cent and 4 per cent respectively last week.
In the domestic market, gold futures (₹87,991/10 gm) was up 2.5 per cent and silver futures (₹1,00,738/kg) gained 3.6 per cent.
MCX-Gold (₹87,991)
Gold futures (April) extended the upswing and broke out of the resistance at ₹86,500 last week. This has opened the door for another leg of rally.
From the current level, gold futures is expected to touch ₹90,000 soon. A breach of this can lift it to ₹95,000.
On the other hand, if there is a decline from the current level, the contract can find support at ₹86,500. Below this, the nearest notable support is at ₹84,200.
As it stands, the sentiment for gold futures appears positive, keeping the chances high for the rally to extend.
Trade strategy: Last week, we recommended going long on gold futures if it breaks out of ₹86,500. Retain this trade. But alter the stop-loss from ₹84,800 to ₹85,300. Book profits at ₹90,000.
MCX-Silver (₹1,00,738)
Silver futures (May) surpassed the psychological level of ₹1,00,000 and closed comfortably above it. The contract marked a high of ₹1,01,999 on Thursday before moderating to ₹1,00,738. The chart is clearly bullish.
The immediate resistance for silver futures can be spotted at ₹1,04,000. Above this, ₹1,10,000 is a potential barrier.
In case the contract drops from the current level, it can find support at ₹1,00,000 and ₹98,000. So long as silver futures remain above ₹98,000 the near-term view will be bullish.
Trade strategy: Buy silver futures at ₹1,00,700 and on a decline to ₹98,000. Place stop-loss at ₹97,000. Book profits at ₹1,04,000. After the trade is initiated, when the contract rises to ₹1,02,000, revise the stop-loss to ₹99,500.
