Gold and silver prices dropped last week on profit booking. While the former lost 3.4 per cent the latter was down 3.8 per cent as they closed at $2,334 and $30.3 per ounce, respectively.Similarly, on the Multi Commodity Exchange, gold futures dropped 3.3 per cent to end at ₹71,256 (per 10 gram), whereas silver futures was down 0.5 per cent to close at ₹90,548 (per kg).
MCX-Gold (₹71,256)
Gold futures (June contract) began last week on the front foot, as it hit a record high of ₹74,442 on Monday. However, it changed direction abruptly and declined.But there is support ahead at ₹70,000. So long as this holds true, the trend will be bullish. If gold futures fall below ₹70,000, the short-term outlook can turn weak where it could fall to ₹67,000.If the contract rebounds from ₹70,000, it can recover and retest ₹74,400. A breakout of this can lift the contract to ₹78,000 and ₹80,000, potential resistance levels.Trade strategy: One can buy gold futures if the price dips to ₹70,100. Place stop-loss at ₹69,200. When the price moves up to ₹72,500, trail the stop-loss to ₹70,200. Book profits at ₹74,400.
MCX-Silver (₹90,548)
Silver futures (July series), too, opened last week on a strong note. It marked a record high of ₹95,950 on Tuesday before starting to fall.Although the broader trend remains bullish, there is a possibility for silver futures to see more correction. In such a case, it can find support at ₹86,000. This is a key support because a breach of this can turn the near-term trend bearish. Notable support below ₹86,000 are at ₹83,000 and ₹80,000.That said, we expect the contract to bounce off ₹86,000 and rally back to ₹93,000 or even to ₹95,000.Trade strategy: Go long with stop-loss at ₹82,750 when the price falls to ₹86,000. When silver futures recover to ₹90,000, revise the stop-loss to ₹87,000. Liquidate the longs at ₹93,000.SHARE
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