Gold dropped and gave away all the intraweek gains on Friday following a positive UoM Consumer sentiment data in the US. However, silver managed to hold on to its gains.

In dollar terms, gold ended last week at $2,004.2 per ounce, with a minor loss of 0.2 per cent. Gold futures on the Multi Commodity Exchange (MCX) lost 0.3 per cent and closed the week at ₹60,329 (per 10 gram).

On the other hand, silver, in terms of dollars, was up 1.6 per cent last week as it ended at $25.4 an ounce. The silver futures on the MCX appreciated 1.5 per cent to close the week at ₹75,677 (per kg).

MCX-Gold (₹60,329)

The June gold futures, which rallied until Thursday, saw a sharp decline on Friday leading to a small weekly loss. Yet, it managed to close above the ₹60,000-mark where the 20-day moving average coincides.

So, the overall trend remains positive. We expect gold futures to regain traction sooner or later and then move up to ₹63,000.

On the other hand, in case the contract declines, there are supports at ₹59,000 and ₹58,000. That said, a fall below ₹59,000 is less likely.

Trade strategy: Hold the longs initiated at ₹60,511 last week. Add more longs if the price softens to ₹59,500. Place stop-loss at ₹58,800. When the contract touches ₹62,000, tighten the stop-loss to ₹60,500. Book profits at ₹62,800.

MCX-Silver (₹75,677)

The May silver futures continued its northward journey last week. Although there might be a minor corrective decline from here, the likelihood is high for the contract to recover and extend the upswing.

While there is a potential to touch ₹78,000 in the short term, the contract might even touch ₹80,000. On the other hand, if there is a dip, the contract might move lower to the ₹71,500-72,000 band before resuming the rally. Subsequent support is at ₹70,000.

Trade strategy: The target of ₹77,500 for the longs initiated at ₹74,750 was hit last week. Since there is a chance for a correction from here before going up, one may wait before taking fresh long positions.

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