The precious metals extended the gains for the second week straight. Gold and silver appreciated 1.2 per cent and 2.5 per cent as they closed the week at $2,002.9 and $24.3 per ounce respectively.

Likewise, on the MCX, gold futures was up 0.9 per cent and silver futures gained 1.1 per cent by closing the week at ₹61,620 (per 10 gram) and ₹75,551 (per kg) respectively.

MCX-Gold (₹61,620)

Gold futures (February contract), after gaining early last week, was largely charting a sideways trend. The bulls are now staring at a resistance at ₹61,800.

If this level is breached, we can see a quick rally to ₹63,000, a potential resistance. Subsequent resistance can be seen at ₹65,000.

On the other hand, if there is a fall, there is a support at ₹60,930 – its 20-day moving average. Nearest support below this is at ₹59,900. A breach of this level will turn the trend bearish.

Trade strategy: Since gold futures has a resistance at ₹61,800, traders can sit out for now. Go long when the contract breaks out of this barrier.

Target and stop-loss for this trade can be at ₹63,000 and ₹61,100. As a risk management measure, when the price touches ₹62,500, tighten the stop-loss to ₹61,900.

MCX-Silver (₹75,551)

Silver futures (March series) closed above the important level of ₹75,000 on Friday after consolidating in the preceding sessions. This has opened the door for further rally.

The nearest notable resistance is at ₹78,000. So, the contract can potentially rally to this level this week. A breakout of this level can lift silver futures to ₹79,400.

Alternatively, if the price drops below ₹75,000, silver futures might extend the downswing to ₹73,500, a support. Next support is at ₹72,500. A fall below this level is unlikely.

Trade strategy: Traders holding longs in December futures can roll over them to March contract. Stop-loss can be placed at ₹73,400 initially.

When the contract rises to ₹77,000, revise the stop-loss up to ₹75,800. Book profits at ₹78,000.

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