Gold registered a record high in the domestic market as the futures contract on the Multi Commodity Exchange (MCX) touched ₹56,850 (per 10 gram) on Friday before closing a little lower at ₹56,658. Thus, it gained 0.6 per cent for the week. In terms of dollars, the price of spot gold went up 0.3 per cent last week as it closed at $1,926.6 per ounce.

That said, silver witnessed weekly loss in both rupee and dollar terms. The silver futures lost 1.3 per cent to end the week at ₹68,547 (per kg), whereas in the global market the price of spot silver dropped 1.2 per cent to close at $23.95 an ounce.

MCX-Gold (₹56,658)

In the first half of last week, the MCX gold futures (February contract) was flat. Towards the end of the week, it rallied and registered a gain for the week. Bulls continue to be in command and fresh longs continue to come in. The cumulative Open Interest (OI) of gold futures on the MCX went up to 21,979 contracts on Friday compared with 21,082 contracts a week ago.

Given the existing momentum, gold futures could exceed our target of ₹57,000 and rally to ₹58,000. In case there is a decline, it has support at ₹56,000 and ₹55,200.

Trade strategy: Continue to hold the longs taken at ₹55,000. Revise the stop-loss from ₹55,200 to ₹55,800. Also, revise the target upside from ₹57,000 to ₹58,000 as the upside momentum sustains well backed by fresh long build-ups.

MCX-Silver (₹68,547)

The March silver futures ended the week 1.3 per cent lower at ₹68,547 compared with the preceding week’s close of ₹69,427. Therefore, the price range of ₹67,000-70,000 remains valid and until it stays so, the next leg of trend will be uncertain.

As the price dropped, the cumulative OI of silver futures on the MCX dropped to 19,512 contracts on Friday versus 21,817 contracts by the end of the previous week. This indicates some long unwinding. However, it need not be considered bearish until the range holds true.

A breakout of ₹70,000 can induce positive momentum that can lead to a quick rally to ₹73,000, whereas a breach of the support at ₹67,000 will open the door for a decline to ₹64,000 in the short term.

Trade strategy: Stay out. Take fresh longs above ₹70,000. Target and stop-loss for this can be at ₹73,000 and at ₹68,300 respectively.