Bullion prices rose in the second half last week as the dollar retreated. However, while gold managed to post a weekly gain, silver remained in the negative territory.

Gold, in dollar terms, appreciated 0.7 per cent last week and closed at $1,867.8 an ounce. Similarly, gold futures on the Multi Commodity Exchange (MCX) was up 0.8 per cent and ended at ₹56,150 per 10 gram.

On the other hand, silver, in terms of dollars, lost 3.4 per cent to end at $20.5 per ounce. On the domestic front, the silver futures contract on the MCX was down 2.3 per cent to close the week at ₹62,890 per kg.

MCX-Gold (₹56,150)

The April futures expiry of gold saw a decline in the early part of last week. However, the contract found support at ₹55,000 leading to a sharp bounce in the last two days of the week.

As price rose, the cumulative Open Interest (OI) of gold futures increased marginally to 16,904 contracts on Friday as against 16,549 a week ago. This shows long build-up.

However, there is a roadblock at ₹56,400. A breach of this can result in a rally to ₹57,500 or even to ₹58,800. But if the contract declines from the current level, there are supports at ₹55,000 and ₹54,400. A fall below ₹54,400 this week is less likely.

Trade strategy: Last week, we suggested to go short below ₹55,400. The stop-loss at ₹56,000 was triggered on Friday. Stay out for now.

Go long if gold futures break out of ₹56,400. Target and stop-loss can be at ₹58,000 and ₹55,700 respectively.

MCX-Silver (₹62,890)

The recovery in silver futures last Friday was not strong enough to lift the price above a hurdle at ₹63,000. Above that lies another important resistance at ₹65,000. The bias will be bearish until this resistance stays true. This is a crucial level to cross for the bulls to turn the tide in their favour.

If that happens, we might see a quick rally towards the resistance at ₹67,400. Subsequent resistance is at ₹70,000. On the other hand, the nearest support can be spotted at ₹60,000.

Trade strategy: The target of ₹ 63,000 for the short position recommended a couple of weeks ago was hit last week.

Silver futures remains a bit bearish and has crucial resistances at ₹63,000 and ₹65,000. Yet, a potential rally in gold can lift the sentiment in silver as well. So, the probability of a move on either side is equal. Stay on the fence for now. Go long above ₹65,000 with stop-loss at ₹62,500. Target can be ₹69,800.