The precious metals witnessed profit booking last week as well leading to a fall in prices. Gold, in dollar terms, declined 2.8 per cent to close at $1,936.8 per ounce. Silver lost 4.3 per cent and ended the week at $22.2 an ounce.

Similarly, gold futures on the MCX was down 2.2 per cent and silver futures declined 3.1 per cent and wrapped up the week at ₹59,659 (per 10 gram) and ₹70,033 (per kg) respectively.

MCX-Gold (₹59,659)

Gold futures (December contract) closed below the support at ₹60,700 and ₹60,000 last week. This increases the chance for further decline.

The 50-day moving average, currently at ₹59,400, can provide some support. But the chart shows that the contract could drop to ₹59,000. The price band of ₹58,700-59,000 is a support.

A breach of ₹58,700 can turn the trend bearish. On the other hand, if there is a bounce off ₹58,700, gold futures could rally to ₹60,000. A breakout of this level can lift it to ₹60,700.

Trade strategy: Stop-loss at ₹59,850 for the longs we suggested at ₹61,156 was triggered last week.

Stay on the sidelines for now. Buy gold futures with stop-loss at ₹58,500, if it falls to ₹59,000. Exit at ₹60,000.

MCX-Silver (₹70,033)

Silver futures (December series) managed to close just above the key support at ₹70,000. But the prevailing price action shows bearish bias, and the support might be taken out.

If ₹70,000 is breached, we are likely to see a quick fall to ₹67,500. Support below this level can be seen between ₹66,000 and ₹66,500.

On the other hand, if the contract rebounds from ₹70,000, it can see a rally back to ₹72,500 and possibly to ₹73,600.

Trade strategy: Stay out for now. Initiate fresh short positions if silver futures fall below the support at ₹70,000. Place initial stop-loss at ₹71,800.

When the contract touches ₹67,500, tighten the stop-loss to ₹69,500. Book profits at ₹66,500.