Gold and Silver began the week on a weak note. The prices fell, but managed to bounce back on Friday recovering all the loss and close marginally higher. On the global front, spot gold has closed at $1,923.91 per ounce, up 0.25 per cent and silver at $23.04, up 0.48 per cent.

The outcome of the US Federal Reserve meeting on Wednesday can be a major driver for the bullion prices this week. That could set the tone for gold and silver, going forward.

On the domestic front, gold futures contract on the Multi Commodity Exchange (MCX) rose 0.17 per cent to close the week at ₹58,999 per 10 gram. Silver futures contract has closed at ₹72,165 per kg, up 0.84 per cent.

Gold outlook

The level of $1,900 is giving support as of now. However, strong resistance is around $1,950. Gold has to breach this resistance to move up towards $2,000 again. The bias is negative for the short term.

The chances are looking high for gold to break $1,900 and fall to $1,875 and $1,850 in the short term.

MCX Gold (₹58,999 per 10 gram): The MCX-Gold futures contract has been range bound between ₹58,000 and ₹60,000 for almost three months now. Within this range, the contract made a low of ₹58,354 last week and has risen back well from there. If this bounce sustains, the chances are high for the gold futures contract to rise towards ₹59,800 and ₹60,000 in a week or two.

Broadly, the contract will have to get a breakout on either side of ₹58,000-60,000 to give clarity on the next direction of move. Until then, the sideways consolidation can continue.

A break below ₹58,000 will be bearish to see ₹56,300-56,000. On the other hand, a strong rise above ₹60,000 can see ₹61,500-62,000 on the upside.

Trade Strategy: We suggest traders to stay out of the market. Wait for the range breakout to get clarity and then take trades accordingly.

Silver outlook

Silver has been stuck in between $22 and $25.25 per ounce since June this year. It made a low of $22.30 last week and has risen back. The chances are looking high for the price to move up towards $25-$25.25 – the upper end of the range in the coming weeks.

A trendline resistance is at $25.45. So, silver has to rise above $25.45 to become bullish. Only in that case, a rise to $30 will come into the picture.

In case silver declines below $22, it can fall to $20. For now, the sideways range is still intact.

MCX Silver (₹72,165 per kg): The silver futures contract made a low of ₹70,062 and has risen back very well from there. The support around ₹70,000 has held very well.

The short-term outlook is bullish. The silver futures contract can rise to ₹75,000-75,200 in a week or two.

Broadly, ₹72,000-75,000 looks likely to be the trading range for now. A breakout on either side of this range will determine the next move.

Trade Strategy: Traders with high-risk appetite can go long at current levels. Accumulate on dips at ₹71,200. Stop-loss can be placed at ₹69,850. Trail the stop-loss up to ₹72,600 as soon as the contract moves up to ₹73,100. Move the stop-loss further up to ₹74,100 when the contract touches ₹74,650.  Exit the long positions at 74,980.