Gold prices in the spot market dropped to ₹2,651.8/gram (of 24 karat), down from ₹2,690/gram in the previous week. Gold futures on MCX closed 1.5 per cent down at ₹26,496 (per 10 gram). Had the rupee been stronger, the fall would have been even steeper. Silver prices were, however, down much more sharply. At ₹39,626 (per kg), MCX Silver futures was down 4 per cent for the week. Rupee touched 61.19 against the dollar and closed the week at 60.8, down from the previous week’s 60.6. The weakness in the currency is partially due to the gains in price of oil in the international market. Brent crude rose to $98.3/barrel from $97.11/barrel in the previous week. The mid-week sell off in the stock market also hit the rupee. Going ahead, as the Fed winds up stimulus, emerging market currencies, including the rupee, may face pressure.

Technical levels

The targets for both MCX gold and MCX Silver worked out perfectly last week. In MCX Gold, the first support at ₹26,800 was cut and the contract hit ₹26,461. This week, the downtrend may continue. If ₹26,400 is cut, prices can fall to ₹26,000. However, as there is a strong support for the contract at ₹26,000 levels, breaking it will be little tough unless the rupee holds. Below ₹26,000, the target will be 25,800. On an upside the contract may rise to ₹26,800 or ₹27,000. MCX Silver too may see a fall this week. If the support at ₹39,500 is broken, it can even move down to ₹36,000. Immediate targets will, however, be ₹39,000 and ₹38,600. Upside, the first resistance is at ₹41,000 and the next is ₹41,700.

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