The precious metals extended their decline last week. In terms of dollars, gold and silver lost 0.9 per cent and 2.7 per cent to end at $1,832.2 and $21.6 per ounce, respectively.

Similarly, on the MCX, gold futures and silver futures were down 1.3 per cent and 2.4 per cent to close at ₹56,871 (per 10 gram) and ₹68,170 (per kg) respectively.

MCX-Gold (₹56,871)

Gold futures (December contract) depreciated last week and remains bearish. The nearest support for gold futures is the price band of ₹54,800-55,150.

However, in dollar terms, it found a support on the back of which the price consolidated for most part of last week. In case there is a recovery, which is likely to be a corrective one, MCX gold futures will face resistance at ₹57,850 and ₹58,250. Above these levels is the critical barrier of ₹58,700.

Trade strategy: We suggested selling gold futures at ₹57,600 last week with a stop-loss at ₹59,100. Since there is a chance for a corrective rise, tighten the stop-loss to the entry price of ₹57,600.

When the contract touches ₹55,900, tighten the stop-loss to ₹56,600. Retain the target at ₹55,150.

MCX-Silver (₹68,170)

Silver futures (December) dropped to mark a low of ₹65,666 early last week. However, it recovered to close the week higher at ₹68,170. There is a support for silver in dollar terms which restricted the fall last week. This might lead to a corrective rally.

In such a case, MCX silver futures too could see an up move. The nearest resistance is the price band of ₹70,000-71,000. Subsequent resistance is at ₹72,650. On the other hand, notable support levels are at ₹65,600 and ₹63,000. 

Trade strategy: The target level of ₹68,000 for the shorts taken at ₹69,857 was triggered last week. Now, we recommend staying out. If there is a rally, initiate short at ₹70,000 with a stop-loss at ₹71,200. Exit at ₹65,600.

But if the contract slips below ₹65,600, go short for a target of ₹63,000. Stop-loss at ₹67,000.