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Silver made use of the decline in dollar last week by producing a gain, whereas gold depreciated.
In terms of dollar, silver appreciated 3.7 per cent and ended at nearly $24.1 an ounce. Silver futures (May expiry) on the Multi Commodity Exchange (MCX) went up 2.6 per cent as it closed at ₹72,218 (per 10 gram).
On the other hand, gold, in dollar terms, lost 0.5 per cent over the past week by ending at $1,967.9 per ounce. Whereas gold futures (June series) on the MCX lost 0.6 per cent as it closed at ₹59,612 (per kg).
MCX-Gold (₹59,612)
The June expiry gold futures ended last week little lower. However, the contract has not turned bearish as the price action hints at the formation of a range between ₹59,000 and ₹60,800. Therefore, unless gold futures move out of this range, the next leg of trend cannot be predicted clearly.
A breakout of ₹60,800 can lead to another upswing, potentially lifting the contract to ₹62,000 and ₹63,000. But if the support at ₹59,000 is breached, we might see a fall to ₹57,500.
Trade strategy: Since there is no clear trend, traders can stay away from taking fresh positions.
MCX-Silver (₹72,218)
The silver futures extended the rally and managed to close above ₹72,000 last week. However, there is a chance for the contract to see either a sideways movement or a correction from here. That said, if the bulls continue to push the prices up, the contract might rally to ₹74,000 - a resistance. Subsequent resistance is at ₹77,000.
But if there is a dip, the contract might find support between ₹70,000 and ₹69,000. Below these levels, there is a support at ₹67,400.
Trade strategy: As there are chances for a sideways movement or a correction, traders can refrain from trading silver futures for now.
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