Gold and silver prices appreciated last week. MCX gold futures was up 1.7 per cent and MCX silver futures gained 1.4 per cent as they closed at ₹69,789 (per 10 gram) and ₹82,493 (per kg) respectively.
MCX-Gold (₹69,789)
Gold futures (October) bounced off the support at ₹68,000 recently. The chart shows that it faces a resistance at ₹71,300. If this level is breached, the contract can extend the rally to ₹75,000. Before this, there are minor resistances at ₹73,000 and ₹73,800.
Failure to surpass ₹71,300 can result in the contract retesting ₹68,000 in the short term. A breach of this can lead to a fall to ₹65,000.
Trading strategy: Buy gold futures once it breaks out of ₹71,300. Target and stop-loss can be at ₹75,000 and ₹69,500 respectively. Post initiating the trade, when the contract touches ₹73,800, revise the stop-loss to ₹72,500.
MCX-Silver (₹82,493)
Silver futures (September) has a support band between ₹80,000 and ₹82,000. Since the contract closed above ₹82,000 last week, there is a chance for a recovery. However, there is a resistance at ₹85,000.
A move above ₹85,000 can trigger a short-term upswing to ₹90,000. But in case the contract falls below ₹80,000, it can decline to ₹77,300 or even to ₹75,000, notable support levels.
Trading strategy: Buy silver futures if it surpasses ₹85,000. Target and stop-loss can be at ₹90,000 and ₹82,000 respectively. Trail the stop-loss to ₹86,000 when the contract touches ₹88,000.