Gold gained for the third week in a row, whereas silver remains below a barrier. In terms of dollars, gold was up 1.3 per cent last week, whereas silver lost 1.3 per cent as they closed at $2,006.4 and $23.1 per ounce respectively.
Similarly, on the MCX, gold futures gained 0.7 per cent, but silver futures was down 1.6 per cent – they ended the week at ₹61,156 (per 10 gram) and ₹71,717 (per kg) respectively.
Gold futures (December contract), after a minor blip early last week, resumed its upmove. It has closed above ₹60,400 for two weeks in a row, showing good upward momentum.
As it stands, the likelihood of further rally is high. The nearest resistance can be spotted at ₹62,000 and ₹62,500. A breakout of ₹62,500 can trigger a rally to ₹65,000.
On the other hand, if there is a fall in price, gold futures can find support at ₹60,400. Notably, the price band of ₹60,000-60,400 is a good base. A breach of ₹60,000 can turn the short-term trend bearish. But this is unlikely to happen this week.
Trade strategy: Go long now at around ₹61,156 and accumulate if the price dips to ₹60,400. Place stop-loss at ₹59,850. When the contract touches ₹61,500, tighten the stop-loss to ₹60,700. Book profits at ₹62,400.
Silver futures (December series) was unable to extend the gain last week. It fell on the back of the resistance at ₹73,000. The 200-day moving average lies at ₹73,600, another hurdle.
But it remains above the key support region of ₹70,000-71,000. So, essentially, the contract should breach either ₹73,600 or ₹70,000 in order to establish a trend. The prevailing price action hints that silver futures could stay sideways for some more time.
If silver futures break out of ₹73,600, it can move up to ₹76,500, a barrier. Subsequent resistance is at ₹78,000. But if the contract declines below ₹70,000, it could see a quick fall to ₹67,500.
Trade strategy: Go long in case the contract surpasses ₹73,600 mark. Target and stop-loss of this trade can be at ₹76,500 and ₹71,900 respectively.