Gold ($2,883/ounce) and silver ($32.1/ounce) went up 0.7 per cent and 0.9 per cent respectively last week.
In the domestic market, gold futures (₹84,687/10 gm) was down 0.2 per cent whereas silver futures (₹95,586/kg) gained 0.3 per cent. As rupee gained versus dollar, the return in rupee terms is lower for the precious metals.
MCX-Gold (₹84,687)
Gold futures (April) was largely witnessing a zig-zag price movement between ₹84,600 and ₹86,360 through the last week. Indeed, ₹86,360 is a record high for gold futures in the domestic market.
Although the bull trend is intact, there is a possibility for a moderation in price. Such a brief correction can drag the price to ₹83,000. If the downswing extends, the contract can touch ₹81,700.
An eventual rally, either from the current level or after a possible correction as aforementioned, can take gold futures to ₹90,000.
Trade strategy: Retain the buy we suggested at ₹84,800 last week. Add longs if the price dips to ₹83,000. Keep a stop-loss at ₹81,600.
When the contract touches ₹87,000, revise the stop-loss to ₹85,800. Tighten the stop-loss further to ₹88,000 when the price hits ₹89,000. Exit at ₹90,000.
MCX-Silver (₹95,586)
Silver futures (March) saw a drop in price in the first half of last week. But after marking a low of ₹92,914 it recovered and rallied to make an intraweek high of ₹98,199 before moderating to the current level.
That said, we expect the broader uptrend to stay true. But there might be a minor correction in price to ₹93,000. Post this, silver futures can see an upswing to ₹1,02,500.
Trade strategy: Retain silver futures long initiated at an average price of ₹94,450. Stop-loss can be at ₹91,300. When the contract rises to ₹98,500, alter the stop-loss to ₹96,000. On a rally to ₹1,00,000, trail the stop-loss to ₹98,500. Exit at ₹1,02,000.
