Bullion Cues: Weakness may deepen

Last week, the prices of precious metals experienced a decline. Gold and silver both saw drops of 0.7 and 6.3 percent respectively. In the domestic market, gold futures fell by 2.4 percent, while silver futures declined by 6.5 percent. Gold futures (Dec) experienced a breach of support at ₹1,48,000 during the week. Although there were minor recoveries in the last two sessions, the contract failed to reclaim the ₹1,48,000 level.

While there is a possibility for the contract to rise to ₹1,50,000, a recovery beyond this point is less probable. For the outlook to turn positive, the price needs to surpass ₹1,51,700. At present, there is a high probability of further decline. The nearest support levels are at ₹1,43,500 and ₹1,41,000. Investors should consider shorting the contract if the price rises to ₹1,50,000, with a target of ₹1,43,500 and a stop-loss at ₹1,52,000.

If the contract falls below ₹1,46,500 without a price rise, a short trade should be initiated with a stop-loss at ₹1,48,000, and an exit at ₹1,43,500. For silver, the Dec futures breached an important support at ₹2,19,000 last week, marking a low of ₹2,07,971 on Wednesday. The contract showed considerable downward bias, with an anticipated further decline from the current level of ₹2,11,187 or after a corrective rally to ₹2,17,000.

The potential support band for the contract is between ₹2,00,000 and ₹2,00,750. For a bullish outlook, silver futures should break out of the resistance band of ₹2,28,000-2,30,000. Investors should sell if the contract rises to ₹2,17,000, targeting ₹2,00,750 with a stop-loss at ₹2,22,000. If silver futures fall below ₹2,10,000, a fresh short trade should be initiated with a stop-loss at ₹2,15,000, and profits should be booked at ₹2,00,750.