Upswing to extend

Traders can take long positions

Precious metals rallied considerably last week. Gold and silver appreciated 4.5 per cent and 5 per cent to end the week at $2,177.50 and $24.3 per ounce, respectively.

On the MCX, gold futures gained 3.9 per cent to end at ₹66,023 (per 10 gram), whereas silver futures was up 2.7 per cent to close at ₹74,262 (per kg).

MCXGOLD (₹66,023)

Gold futures (April contract) gained in all sessions last week. The chart indicates strong momentum, and the probability of further rally is high.

The contract will most likely hit ₹68,000 in the near term. A breakout of this level can lift gold futures to ₹70,000, a potential resistance.

On the other hand, if there is a fall in price, it will most probably be a corrective decline. There are support levels at ₹65,000 and ₹64,000.

Trade strategy: Traders can buy gold futures now at around ₹66,000 and accumulate if the price falls to ₹65,000. Place initial stoploss at ₹63,900.

When the contract rises past ₹67,000, tighten the stoploss to ₹65,800. Exit at ₹68,000.

MCXSILVER (₹74,262)

Silver futures (May series) appreciated over the last week. It crossed over both 20 and 50day moving average and managed to close above the resistance at ₹74,000.

It made a high of ₹74,841 on Friday. Note that ₹75,000 is a potential hurdle for the stock. Yet, we expect the contract to break out of ₹75,000 and rally to ₹76,760.

Trade strategy: Last week, we recommended going long on silver futures at ₹72,280 for a target of ₹75,000. Post the adjustments after the rally, the long position will be active with revised stoploss at ₹73,000.

Since the likelihood of a rally is high, one can hold this trade with some modifications. Alter the stoploss to ₹72,700 to adjust for a potential corrective fall. Target can be revised up from ₹75,000 to ₹76,700. When the contract goes above ₹76,000, tighten the stoploss to ₹74,500.