Gold performed better than silver last week. The yellow metal even gained slightly in dollar terms despite the greenback’s considerable rebound recently. Gold, in dollars, rose 0.4% last week to end at $1,962 an ounce on Friday, while silver lost 1.2% to end the week at $24.6 an ounce.
On the Multi Commodity Exchange (MCX), gold futures closed almost at ₹59,309 for 10 grams. Silver futures, on the other hand, fell 1.3% and closed at ₹74,970 per kg.
MCX-Gold (₹59,309)
Gold futures (August series) hit an intra-week high of ₹59,984 on Thursday before experiencing a decline to ₹59,309. Since the contract closed above the 50-day moving average on Tuesday, the trend has turned bullish. Thus, the drop towards the end of last week should be corrective.
We expect the contract to regain momentum and approach ₹62,000 in the near term. The closest support is at ₹58,800 and ₹58,000. A drop below ₹58,800 this week is less likely.
Commercial strategy : Last week’s rally above ₹59,600 signifies an exit from the shorts and the initiation of new longs with a stop-loss at ₹58,600. Keep this trade.
Going forward, when the contract goes above ₹60,500, change the stop-loss to ₹59,800. Tighten the stop-loss further at ₹61,000 when the price touches ₹61,500. Exit the longs at ₹61,800.
MCX-Silver (₹74,970)
Silver futures (September contract), which rallied through mid-week, turned around and fell sharply in the past two sessions. However, the contract retains the bullish tilt.
The price range of ₹74,500-74,800 is a support range. As it stands, the likelihood of a bounce out of this price region seems high. In such a case, we could see silver futures rising to ₹77,500 and ₹79,000, the closest resistances.
But if the contract falls below ₹74,500, it might find support at ₹73,500 and ₹72,500.
Commercial strategy : Buy silver futures now and dive to ₹74,500. Place the stop-loss at ₹73,300. When the contract touches ₹77,500, tighten the stop-loss to ₹75,800. Book profit at ₹78,800.
