Precious metals appear to have resumed the uptrend as they appreciated last week. In terms of dollars, gold and silver rallied 2.5 per cent and 6.3 per cent as they closed at $2,360 and $28.2 per ounce respectively.

Similarly, on the Multi Commodity Exchange, gold futures gained 2.9 per cent to end at ₹72,727 (per 10 gram), whereas silver futures was up 4.8 per cent to close at ₹84,910 (per kg).

MCX-Gold (₹72,727)

Gold futures (June contract) broke out of the resistance at ₹71,800 last week. This means the uptrend has resumed and the probability for further rally is high.

While ₹73,300 can act as a hurdle, we expect the contract to get past this level and touch ₹75,000 in the near term. Resistance above ₹75,000 is at ₹78,000.

On the other hand, if the contract falls back below ₹71,800, it will most likely extend the downtrend to ₹70,000. A fall below ₹70,000 is less likely.

Trade strategy: We suggested long positions on a break of ₹71,800. Hold this trade with the stop-loss at ₹70,500. When the contract surpasses ₹73,500, raise the stop-loss to ₹72,000. Exit at ₹75,000.

MCX-Silver (₹84,910)

Silver futures (July series), too, rebounded and crossed over ₹83,000. This has opened the door for further appreciation.

There is a resistance ahead at ₹86,000. But given that the broader trend is bullish, silver futures can push ahead of ₹86,000 and touch ₹87,500 in the near term.

In case there is a reversal from here, the contract can find support at ₹83,000 and ₹80,000. A drop below the latter is unlikely to occur this week.

Trade strategy: Last week, we recommended buying silver futures if ₹83,000 is breached. Retain this trade with stop-loss at ₹80,500. When the contract rises past ₹86,000, modify the stop-loss to ₹84,000. Exit at ₹87,500.