The precious metals posted gains last week as the dollar saw some depreciation. Gold and silver, in terms of dollars, gained 1.3 and 2.6 per cent to wrap up the week at $2,016.5 and $25.7 per ounce respectively.

Similarly, the gold futures on the Multi Commodity Exchange (MCX) was up 1.2 per cent by closing at ₹60,628 (per 10 gram) last week; the silver futures gained 2.2 per cent and it closed the week at ₹77,047 (per kg).

MCX-Gold (₹60,628)

The June gold futures marked an intraweek high of ₹61,845 on Thursday before ending the week a little lower at ₹60,628. Although the decline on Friday takes some sheen out of the rally, the bias remains bullish. It will stay so until the support at ₹59,000 holds.

Broadly, we expect the contract to rally towards ₹63,000 in the near term. But if there is a decline from here, there are supports at ₹59,000 and ₹58,000. That said, the likelihood of a fall below ₹59,000 this week is low.

Trade strategy: Retain the long position initiated at ₹60,511. Add more longs if the price softens to ₹59,600. 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 (₹77,047)

Silver futures rallied on short covering but was unable to surpass the previous high of ₹78,791. However, the overall bias is bullish and the likelihood of an upside from here, along with gold, appears high. We expect the contract to gather more traction in the coming days and touch the psychological level of ₹80,000.

On the other hand, in case there is a decline from here, it has a considerable support at ₹75,000. Subsequent support is at ₹72,000. As long as the support at ₹72,000 holds true for July futures, the short-term outlook will remain bullish. That said, a breach of ₹75,000 is less likely.

Trade strategy: Since the probability of an up move is high, we recommend initiating fresh longs now at around ₹77,000. Add more longs if the price dips to ₹75,400. Place stop-loss at ₹73,500. When the contract moves above ₹79,000, tighten the stop-loss to ₹77,500. Exit at ₹79,800.