Gold ($2,910/ounce) and silver ($32.5/ounce) appreciated 1.8 per cent and 4.2 per cent respectively last week.
In the domestic market, gold futures (₹85,877/10 gm) was up 2 per cent and silver futures (₹97,201/kg) gained 3 per cent.
MCX-Gold (₹85,877)
Gold futures (April) found support at ₹84,200 and moved up last week. However, it fell short of breaking out of a crucial resistance at ₹86,500.
Although the overall trend is bullish and there are supports for gold futures, a breakout of ₹86,500 is necessary to establish another leg of uptrend.
If the contract breaches ₹86,500, it can rise to ₹90,000 in the near term. On the other hand, if gold futures declines from the current level, it can find support at ₹84,200. Immediate support below this is at ₹82,600.
Trade strategy: Go long on gold futures with a stop-loss at ₹84,800 if it surpasses the barrier at ₹86,500. When the contract touches ₹88,500, revise the stop-loss to ₹87,000. Book profits at ₹90,000.
MCX-Silver (₹97,201)
Silver futures (May) rallied above the resistance at ₹96,000 last week. The upswing occurred as the contract found support at ₹94,000 where the 50-day moving average lies.
But it closed the week below the resistance at ₹98,000. Above this is the key barrier at ₹1,00,000. For silver futures to see a sustainable upswing it should move past ₹1,00,000. Resistance above ₹1,00,000 is at ₹1,04,000.
In case the contract falls from the current level, it can find support between ₹94,000 and ₹95,000. Below ₹94,000, the nearest base is at ₹92,000.
Trade strategy: At the current juncture, the direction of the next leg of trend remains uncertain. Therefore, we suggest staying out.
