The precious metals extended the decline in line with our expectations. Gold dropped 1.4 per cent in dollar terms to end the week at $1,837.4 per ounce. On the domestic front, the gold futures on the Multi Commodity Exchange (MCX) lost 0.9 per cent to close at ₹56,257 (per 10 gram).

Similarly, silver, in dollar terms, was down 1.8 per cent and closed at $21.6 an ounce. Silver futures on the MCX depreciated 1.5 per cent to wrap up the week at ₹65,631 (per kg).

MCX-Gold (₹56,257)

The April gold futures, after marking an intraweek low of ₹55,691, recovered to end the week at ₹56,257. Thus, it closed above the support at ₹56,120. Although there are no signs of a bullish reversal yet, we might have entered the final phase of the correction.

We might see a rally after the contract falls to ₹55,400. On the upside, the resistance levels are at ₹57,500 and ₹58,800.

Trade strategy: Hold the short position initiated at ₹56,585. But move the stop-loss up to ₹57,500 from ₹56,800 for this week. Book profits when the contract falls to ₹55,400.

MCX-Silver (₹65,631)

The March silver futures moved further south last week. It made a weekly low of ₹64,400 before inching up to close at ₹65,631. Yet, we expect the contract to decline from the current levels. The immediate support is at ₹64,000 and the subsequent one is at ₹62,200.

As it stands, the corrective decline could end anywhere within the price band of ₹62,200-64,000.

On the other hand, if silver futures rally from the current level, it will face hurdles at ₹67,000 and ₹70,000. That said, the trend will turn bullish only if ₹70,000 is decisively breached.

Trade strategy: Hold the short taken at ₹67,576 that we recommended a couple of weeks ago. Since the contract touched ₹65,000 last week, the revised stop-loss would be at ₹66,000. Retain this trade and exit when the price falls to ₹64,200.

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