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Precious metals witnessed a recovery last week. Gold ($3,358/ounce) was up 4.8 per cent whereas silver ($33.50/ounce) gained 3.7 per cent last week. Similarly, in the domestic market, gold futures (₹96,421/10 gm) appreciated 4.3 per cent and silver futures (₹98,054/kg) rallied 2.9 per cent.
MCX-Gold (₹96,421)
The support at ₹91,500, where the 50-day moving average (DMA) coincided, helped gold futures (June) in the rebound. Thus, the bull trend remains intact.
However, there is a resistance ahead at ₹97,600 which can resist the bulls. If gold futures can overcome this hurdle, it can extend the upside to ₹1,00,000. Resistance above this is at ₹1,04,500.
If there is a decline from the current level, gold futures can find support at ₹94,500 where the 21-DMA coincides. Subsequent support is at ₹91,500. Only a breach of ₹91,500 can turn the trend bearish.
Trade strategy: Stay on the sidelines. Go long on gold futures (June) if it breaks out of ₹97,600. The short-term target and stop-loss can be ₹1,00,000 and ₹96,400 respectively.
MCX-Silver (₹98,054)
Silver futures (July) rallied last week. However, it fell short of surpassing the resistance at ₹99,250. Thus, the price band of ₹93,600-99,250 stands valid. Only a clear breach of either of the boundaries of this range can lead to the contract establishing a trend.
If silver futures breaks out of the barrier at ₹99,250, it can add momentum to the bulls wherein the price can be pushed higher to ₹1,03,500, a resistance. A move above this can take the contract to ₹1,05,000.
In case the contract declines, it can find support at ₹96,400 and ₹93,600. A break below the latter can turn the near-term outlook weak. In this scenario, silver futures can fall to ₹90,000 and ₹89,000.
Trade strategy: Buy silver futures (July) if it breaks out of ₹99,250. Target and stop-loss can be ₹1,03,500 and ₹97,000 respectively.
Published on May 24, 2025
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