Precious metals jumped last week on the back of weak US data. In terms of dollars, gold and silver surged 2 and 3.9 per cent to end the week at $2,008.2 and $25 per ounce, respectively.

Similarly, on the Multi Commodity Exchange, gold futures was up 1.5 per cent to close the week at ₹60,511 (per 10 gram). Silver futures ended with a gain of 3.3 per cent by closing at ₹74,570 (per kg).

MCX-Gold (₹60,511)

The June gold futures, which briefly traded above ₹60,800 last week, fell back into the range of ₹59,000-60,800. But now, the likelihood of breaching ₹60,800 appears high. In such a case, the contract can quickly rally to ₹62,000 and even to ₹63,000.

On the other hand, if there is fall from here, there is a support at ₹59,000. Subsequent support is at ₹57,500. Nevertheless, the chances are low for a fall below ₹59,000.

Trade strategy: Traders can go long on gold futures now at ₹60,511. 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 (₹74,750)

The May silver futures soared past the barrier at ₹72,000 last week. It has also closed above another hurdle at ₹74,000, thereby opening the door for further appreciation.

Although we might see a minor correction, eventually, the contract is expected to hit ₹77,500 in the short term. A breach of this can lift it towards ₹80,000.

The nearest support from the current level is at ₹72,000. Subsequent support levels are at ₹70,000 and ₹69,000. That said, a decline below ₹70,000 is less likely.

Trade strategy: Buy now at ₹74,750 and add longs if price dips to ₹71,200. Place stop-loss at ₹69,800. When the contract touches ₹76,000, tighten the stop-loss to ₹74,000. Exit at ₹77,500.

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