Gold ($2,512 per ounce) and silver ($29.8 per ounce), in dollar terms, were up 0.2 per cent and 2.8 per cent respectively last week. In the domestic market, MCX gold futures (₹71,777 per 10 gram) posted a gain of 0.6 per cent, whereas MCX silver (₹85,211 per kg) futures was up 2.4 per cent.

MCX-Gold (₹71,777)

Gold futures (October), despite seeing a mid-week correction in price, closed decisively above the support at ₹71,300 because of a rally on Friday. The bias will be bullish so long as the contract stays above ₹71,300.

The chart indicates that the contract can go up to ₹73,500 and then to ₹75,000 in the next few weeks. A breach of ₹75,000 can take the price up to ₹80,000, a potential barrier.

In case the price falls from the current level, the contract can find support at ₹70,000.

Trade strategy: Last week, we recommended buying gold futures at ₹71,375. Retain this trade with a stop-loss at ₹69,500. When the contract touches ₹73,800, revise the stop-loss to ₹72,500. Book profits at ₹75,000.

MCX-Silver (₹85,211)

Silver futures (September) went past the resistance at ₹84,800 early last week. Although it slipped below this level mid-week, the contract managed to recover on Friday. Henceforth, ₹84,000-84,800 price band will be a support.

The price action hints that the contract is up for another upswing from here. Silver futures can touch ₹89,000 in the near term. A breakout of this level can lift the contract to ₹94,000.

On the other hand, if the contract falls below ₹84,000, the support at ₹80,000 can arrest the decline. Subsequent support is at ₹78,500.

Trade strategy: Hold on to the longs on silver futures we suggested initiating at ₹83,200. Maintain the stop-loss at ₹79,800. When the contract rises above ₹86,000, revise the stop-loss to ₹84,000. Liquidate the longs at ₹89,000.

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