Gold ($2,936/ounce) and silver ($32.5/ounce) went up 1.9 per cent and 1.1 per cent respectively last week.
In the domestic market, gold futures (₹86,010/10 gm) was up 1.6 per cent and silver futures (₹96,200/kg) gained 0.6 per cent.
MCX-Gold (₹86,010)
Gold futures (April) bounced off the support at ₹84,600 last week. However, the contract was unable to break out of the hurdle at ₹86,500. It made an intra-week high of ₹86,592 mid-week, before softening to the current level.
While the broader trend is bullish, the recent price action shows that gold futures might consolidate between ₹84,600 and ₹86,500 before the eventual breakout of the latter.
A breach of ₹86,500 can quickly lift gold futures to ₹90,000. On the other hand, just below ₹84,600, there is another potential support at ₹84,000. If this is taken down, the near-term bullish outlook will weaken. Nearest support below ₹84,000 is ₹82,500.
Trade strategy: Retain the buy we recommended at ₹84,800. But revise the stop-loss up from ₹81,600 to ₹82,500. When the contract touches ₹87,000, revise the stop-loss to ₹85,800. Tighten the stop-loss further to ₹88,000 when the price hits ₹89,000. Exit at ₹90,000.
MCX-Silver (₹96,200)
Silver futures (March) moved up to mark an intra-week high of ₹97,763 on Thursday before softening to the current level of ₹96,200.
For the contract, the nearest support is at ₹96,000. Subsequent support is at ₹93,500. As long as ₹93,500 holds true, the bias will remain bullish. But if this is breached, the outlook might change bearish wherein silver futures can drop to ₹90,000.
But given the current chart set-up, the bias is clearly positive, and the contract can rally to ₹1,02,500.
Trade strategy: Hold on to silver futures long initiated at an average price of ₹94,450. But revise the stop-loss from ₹91,300 to ₹93,000. When the contract rises to ₹98,500, alter the stop-loss to ₹96,000. On a rally to ₹1,00,000, trail the stop-loss to ₹98,500. Exit at ₹1,02,000.