Gold ($2,985/ounce) appreciated 1.3 per cent whereas silver ($33/ounce) lost 2.3 per cent last week. In the domestic market, gold futures (₹87,778/10 gm) and silver futures (₹97,884/kg) was down 0.2 per cent and 2.8 per cent respectively last week.
MCX-Gold (₹87,778)
Gold futures (April) rallied to mark a record high of ₹89,796 before moderating to the current level of ₹87,778. Although the broader trend remains bullish, we cannot reject the possibility of the current downtrend to extend.
From the current level, gold futures might moderate to ₹85,800. Below this, there are supports at ₹85,300 and ₹84,380. As long as the contract stays above this level, the uptrend will be intact.
So, we expect gold futures to dip to ₹85,300-85,800 price region and then resume the uptrend. This up-move can lift the contract to ₹92,000 in the short term.
Trade strategy: Hold on to the longs initiated at ₹86,500 and retain the stop-loss at ₹85,300. But one can revise the target up from ₹90,000 to ₹92,000.
MCX-Silver (₹97,884)
Silver futures (May) marked an intra-week high of ₹1,01,980 early last week. But then the contract started to fall and closed the week at ₹97,884.
There is a possibility of silver futures dipping to ₹96,500-96,000 price zone. Within this price band, a rising trendline and the 50-day moving average coincides. So, the resumption of the rally from this range is highly likely.
On the upside, the contract can hit ₹1,04,000. But if the support at ₹96,000 is taken out, the downtrend can extend to ₹92,000.
Trade strategy: Retain silver futures long initiated at an average price of ₹99,350. Since the price might see a decline, alter the stop-loss from ₹97,000 to ₹95,800. When the contract rises to ₹1,02,000, revise the stop-loss to ₹99,500. Exit at ₹1,04,000.
