Precious metals advanced last week. In terms of dollars, gold and silver appreciated 1.8 per cent and 1.3 per cent last week and closed at $2,622 per ounce and $31.1 an ounce respectively.
Similarly, in the domestic market, gold futures (₹74,821 per 10 gram) was up 0.9 per cent and silver futures (₹90,135 per kg) rallied 1.1 per cent.
MCX-Gold (₹74,821)
Gold futures (December) rose after finding support at ₹73,600 last week. It has been making higher highs since early August.
Given the current momentum, gold futures will most likely break out of the ₹75,000-mark and touch ₹78,000 in the short term. The price band of ₹78,000-80,000 is a potential barrier.
But if there is a fall from the current level, gold futures can find support at ₹73,600. Also, there is trendline support at this level, making it a key base.
Trade strategy: Buy gold futures at ₹74,820 and on a dip to ₹74,000. Place stop-loss at ₹73,300. When the contract rises to ₹76,500, revise the stop-loss to ₹75,500. Exit at ₹78,000.
MCX-Silver (₹90,135)
Silver futures (December) rebounded on the back of a support at ₹88,000. However, it is now facing a resistance at ₹90,800. This should be breached for the bulls to gain traction.
If ₹90,800 is invalidated, silver futures can rally to ₹96,500. Resistance above ₹96,500 is at ₹1 lakh.
But if the contract slips below the nearest support at ₹88,000, it can extend the downswing to the ₹86,000-85,000 support zone. Both 20- and 50-day moving averages coincide at ₹86,000.
Trade strategy: Stay off for now. Go long if silver futures surpasses ₹90,800. Keep stop-loss at ₹88,000. When the contract rises to ₹94,000, modify the stop-loss to ₹91,500. Book profits at ₹96,200.
