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Gold, Silver and the Crude Oil prices fell last week on the back of strong dollar. Among the three, Silver and Crude Oil were badly hit and were down 3.37 per cent and 2.08 per cent respectively. Gold was down 0.96 per cent.
The US Federal Reserve’s decision to slow down the pace of rate cuts in 2025 triggered a sharp rise in the dollar. That in turn dragged the bullion and crude oil price lower last week.
On the global front, the spot gold closed the week at $2,622 per ounce and silver at $29.52 per ounce. Brent Crude Oil ended the week at $72.94 per barrel.
In the domestic market, Gold and Silver Futures contract on the Multi Commodity Exchange (MCX) ended the week at ₹76,420 per 10 gm and ₹88,392 per kg respectively. The MCX Crude Oil contract closed the week at ₹5,938 per barrel.
MCX Gold continues to oscillate within the range. That leaves the near-term outlook unclear. Immediate support is at ₹75,400. Below that ₹75,000 is the next important support. A break below ₹75,000 can take the contract down to ₹74,000 in a week or two.
Resistance is in the ₹77,000-₹77,500 region. A sustained break above ₹77,500 is needed to turn the view positive and take the MCX Gold contract up to ₹79,000.
Broadly, ₹75,000-₹79,000 can be the wide range of trade that can be seen for a few weeks.
Trade Strategy: Considering the range-bound move and the risk/reward ratio, we suggest traders to stay out of the market this week.
Strong supports are at ₹86,500 and ₹85,700. We expect these supports to limit the downside. As such there are good chances for the MCX Silver futures contract to see a fresh rise from either ₹86,500 or ₹85,700. That leg of rise will have the potential to take the contract up to ₹95,300-₹95,500 in the short term.
This view will go wrong, and the contract will come under pressure for more fall only if it declines below ₹85,700. If that happens, a fall to ₹82,000 can be seen.
Trade Strategy: Traders can go long on dips at ₹86,800 and ₹85,800. Keep the stop-loss at ₹83,600. Trail the stop-loss up to ₹89,300 as soon as the contract moves up to ₹90,800. Move the stop-loss further up to ₹91,900 when the price touches ₹93,200. Exit the long positions at ₹94,800.
The MCX Crude Oil Futures contract has been struggling to breach the psychological ₹6,000-mark for some time now. As long as the contract trades below ₹6,000 there are good chances to see a fall in the short term. The contract can come down to ₹5,700-₹5,650, an important support zone. We expect the downside to be limited to ₹5,650. A bounce from the ₹5,700-₹5,650 support zone can take the contract up towards ₹6,000 again.
As seen from the charts, the contract seems to be forming a strong base above ₹5,700. That keeps the probability high for the MCX Crude Oil contract to breach ₹6,000 eventually in the coming weeks. Such a break will boost the bullish momentum. It will also clear the way for a fresh rally to ₹6,300 and ₹6,500 over the medium term.
Trade Strategy: Wait for dips. Go long at ₹5,740 and ₹5,680. Keep the stop-loss at ₹5,580 initially. Exit the long positions at ₹5,970. Trail the stop-loss up to ₹5,780 as soon as the contract goes up to ₹5,840. Move the stop-loss further up to ₹5,850 when the contract touches ₹5,910.
Published on December 21, 2024
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