Comments
Gold, in terms of dollars, witnessed a marginal drop of 0.1 per cent and closed at $1,919.6 per ounce and gold futures on the Multi Commodity Exchange (MCX) was down 0.2 per cent by ending at ₹58,211 per 10 gram.
Silver, in dollar terms, was up 1.8 per cent and MCX silver futures gained 1.3 per cent as they wrapped up the week at $22.8 per ounce and ₹70,030 per kg, respectively. Thus, gold was largely flat last week, whereas silver posted a gain.
That said, the overall bias remains bearish for both precious metals.
MCX-Gold (₹58,211)
Gold futures (August series) declined to mark an intra-week low of ₹57,651 before recovering on Friday to close at ₹58,211. If there is a rally from here, it is likely to be capped at ₹59,000.
Eventually, gold futures is expected to fall, either from the current level or after a rally to ₹59,000. The nearest support is at ₹56,960. Yet, the contract will most probably fall to ₹55,800 in the coming weeks.
Trade strategy: Retain the short trade initiated on gold futures at ₹58,300 last week. Add more shorts if the price moves up to ₹58,900. Place initial stop-loss at ₹59,600.
When the contract slips below ₹57,500, tighten the stop-loss to ₹58,200. On a fall to ₹56,800, exit half of the short positions and tighten the stop-loss to ₹57,600. Liquidate the balance half at ₹55,800.
MCX-Silver (₹70,030)
Silver futures (September contract), after beginning last week with a gap-up, largely stayed flat. Even though the contract has closed above ₹70,000, the breakout does not appear strong enough to consider it as a bullish reversal.
For silver futures to turn the trend bullish, it should pass through the barrier between ₹71,000 and ₹71,300. As it stands, the chances for a fall is high and the price action hints at a fall to ₹65,000 in the short term.
Trade strategy: Hold the short position taken at ₹69,100. Sell more if the price rallies to ₹71,000. Keep initial stop-loss at ₹73,000. When the price falls below ₹67,500, modify the stop-loss to ₹70,000. Book profits at ₹65,000.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.