The precious metals rallied as the dollar depreciated, especially in the first half of last week. But towards the end, the dollar recovered a bit leading to some downward pressure, especially on gold. However, silver produced a weekly gain.

Gold, in dollar terms, lost 0.6 per cent over the past week by ending at $1,977.2 per ounce. Whereas gold futures on the Multi Commodity Exchange (MCX) was down by a marginal 0.2 per cent as it closed at ₹59,273 (per kg).

Silver, in terms of dollar, appreciated 2.7 per cent and ended at $23.2 an ounce. Silver futures on the MCX went up 2.8 per cent as it closed at ₹70,411 (per 10 gram).

MCX-Gold (₹59,273)

The gold futures (continuous contract), which extended the rally early last week, marked a fresh all-time high of ₹60,455. But it lost momentum and remained sluggish for the rest of the week.

The price action hints at a possible correction from here to ₹58,000. This is a support against which the contract can resume the up move, which can lift the contract past the high of ₹60,455. Gold futures has the potential to move towards ₹63,000. However, a break below ₹58,000 can lead to a decline to ₹57,000. A drop below this is less likely.

Trade strategy: We had recommended longs at ₹59,383 last week. Hold this trade. If there is a dip to ₹58,000, add more longs. Place stop-loss at ₹56,300 initially.

When the price rises above ₹61,000, alter the stop-loss to ₹59,800. When the contract touches ₹62,000, move the stop-loss further up to ₹61,000. Book profits at ₹63,000.

MCX-Silver (₹70,411)

The silver futures, in line with our expectations, surged last week. It marked an intraweek high of ₹71,481 on Friday before closing at ₹70,411. This week, there might be a consolidation or a minor correction.

The nearest support from the current level are at ₹69,000 and ₹67,400. A drop below ₹67,400 is less likely as the broader trend remains bullish.

But if the rally continues and the contract goes past ₹72,000, a considerable resistance, we might see a quick upswing to ₹74,000. Above ₹74,000, there is a hurdle at ₹77,000.

Trade strategy: The target of ₹69,500 for the longs initiated at ₹65,000 was hit last week. Since there is a chance for a correction, traders can stay away for now.