Gold and silver price saw a dip last week. In terms of dollars, the former lost 0.9 per cent to end at $2,044.2 per ounce, whereas the latter was down 2.9 per cent and closed at $23.1 per ounce.
On the MCX, gold futures depreciated 1 per cent to wrap up the week at ₹62,557 (per 10 gram); silver futures declined 2.5 per cent to end at ₹72,587 (per kg).
MCX-Gold (₹62,557)
Gold futures (February contract) fell last week and is now hovering around the 20-day moving average, which now lies at ₹62,500. This is a potential support.
Below ₹62,500, there is another key support at ₹61,700. Until the latter holds valid, the bias will be bullish even though the chart hints at bulls losing traction.
If there is a rebound from the current level, gold futures can touch ₹63,800 this week. But if the support at ₹61,700 fails, we could see a drop to ₹60,000.
Trade strategy: We had suggested to buy on dips at ₹62,600. Hold this trade. But keep a tight stop-loss at ₹61,500 since there are signs of a correction. Book profits at ₹63,800.
MCX-Silver (₹72,587)
A mid-week fall led silver futures (March series) post a weekly loss and end at ₹72,587. There is a support at ₹71,400, which can arrest the decline.
In case there is a bounce off ₹71,400, silver futures can rally to ₹75,000. A move above this price is less likely this week.
But if the contract breaks below ₹71,400, it will open the door for a fall to ₹68,000, a support. Subsequent support is at ₹66,500.
Trade strategy: Risk-averse traders can stay out. Those with higher risk appetite can buy silver futures with a stop-loss at ₹70,400 if the price dips to ₹71,800. Liquidate this trade at ₹74,900.