Outlook positive

Precious metals experienced a notable surge in the recent week. Gold prices ($4,342/ounce) and silver prices ($63.90/ounce) both saw an increase of 7.3% and 10.3% respectively. The domestic market followed suit, with gold futures (₹1,51,820/10 gm) up by 5.9% and silver futures (₹2,31,466/kg) rising by 6.6%. Here's a breakdown of the analysis.

Gold futures (Oct) started the week cautiously but gained momentum, rallying sharply in the subsequent sessions. It broke past the resistance level of ₹1,47,000 and is now trading above both the 21- and 50-day moving averages. The short-term outlook for gold futures appears promising, with a potential rise to ₹1,58,000. However, a minor correction to ₹1,49,000 is also possible before this upward trend continues.

If gold futures fall and break below the resistance-turned-support at ₹1,47,000, it could extend the decline to ₹1,43,000. But currently, a rally seems likely. The recommended trade strategy is to buy on a dip to ₹1,49,000, aiming for a target of ₹1,58,000 and setting a stop-loss at ₹1,46,000.

Silver futures (Sep) rebounded thanks to the support level at ₹2,14,000. It surpassed the hurdle at ₹2,27,000, closing the week at ₹2,31,466. The price action indicates a positive bias, but there is a barrier ahead at ₹2,38,000. A breakout of this barrier could pave the way for a sustainable rally. An important resistance level above ₹2,38,000 is ₹2,59,000.

If the contract drops from its current level, it might find support at ₹2,27,000. A breach of this could push the price further down to ₹2,20,000. The suggested trade strategy is to go long if the price dips to ₹2,27,000, with a target of ₹2,50,000 and a stop-loss at ₹2,19,000.