Bullion Cues: Support holds

Last week, precious metals prices faced a decline. Gold and silver both experienced a drop, with gold's price falling to $4,429.80 per ounce and silver to $66.20 per ounce. In India, gold futures slipped 2.2% to ₹1,52,767 per 10 grams, while silver futures decreased 2% to ₹2,37,658 per kilogram. The decline in gold futures reached its lowest point at ₹1,49,665 in the October contract.

However, the 50-day moving average and the 61.8% Fibonacci retracement of the recent rally both converged at ₹1,50,000, providing a crucial support level for the market. As long as this support remains intact, a positive outlook for gold futures is expected. In the near term, gold futures could surpass the previous high of ₹1,64,773 and reach ₹1,67,000.

Conversely, if the price falls below the support at ₹1,50,000, a downward trend could extend to ₹1,44,000. A further support level exists at ₹1,40,000. For trade strategy, consider buying gold futures (October) at ₹1,52,700, with a stop-loss at ₹1,49,000. Should the contract advance to ₹1,60,000, adjust the stop-loss to ₹1,55,000, and take profits at ₹1,67,000.

Silver futures also experienced a decline, reaching a low of ₹2,31,811 last week. However, the price quickly recovered as there was a support at ₹2,32,000. The 50-day moving average for silver futures sits at ₹2,34,525, creating a support band between ₹2,32,000 and ₹2,34,525. In the upcoming sessions, a rally in silver futures is anticipated.

Although resistance levels of ₹2,45,000 and ₹2,55,000 exist, the contract could surpass these levels and climb to ₹2,60,000 in the short term. Should the base at ₹2,32,000 be decisively broken, silver futures could plummet to ₹2,25,000. Support below ₹2,25,000 is at ₹2,18,500. For trade strategy, buy silver futures (December) at ₹2,37,500, using a stop-loss at ₹2,29,000.

If the contract rebounds to ₹2,50,000, tighten the stop-loss to ₹2,42,000, and book profits at ₹2,60,000.