The precious metals’ prices tumbled last week. In terms of dollars, gold and silver slumped 4 per cent and 5.7 per cent to end at $1,848 and $22.2 per ounce, respectively.

Similarly, on the MCX, gold futures shed 3 per cent to close at ₹57,600 (per 10 gram), whereas silver futures declined 4.7 per cent to end at ₹69,857 (per kg).

The charts indicate that the trend has turned bearish, and more downside is on the cards.

MCX-Gold (₹57,600)

Gold futures (December contract) posted loss in all sessions last week and broke the triangle pattern on the downside. It also breached a support at ₹58,700. Thus, the trend has clearly turned bearish.

From the current level, the contract will most probably extend the downside. The nearest support can be seen between ₹54,800 and ₹55,150. That said, before falling to these levels, we might see gold futures inching up to test ₹58,700.

Trade strategy: Short gold futures now at around ₹57,600 and add shorts in case the price moves up to ₹58,500. Place stop-loss at ₹59,100 initially.

When the contract touches ₹55,900, tighten the stop-loss to ₹56,600. Book profits ₹55,150.

MCX-Silver (₹69,857)

Silver December futures fell sharply and closed below the psychological level of ₹70,000. Although the close below ₹70,000 does not appear decisive on the charts, the overall bearish inclination means that we can assume the support is breached.

This has opened the room for further decline. There is a good chance for the contract to fall to ₹68,000 soon. A breach of this level can drag the contract further to ₹63,000. If there is a recovery, it might not extend beyond ₹72,000.

Trade strategy: Sell silver futures now at ₹69,857 and add shorts if price rises to ₹71,100. Keep initial stop-loss at ₹72,000. When the contract falls to ₹68,800, tighten the stop-loss to ₹69,800. Book profits at ₹68,000.