Bullion Cues: Rally Stalls At A Barrier

Gold ($3,325/ounce) was up 2.6 per cent whereas silver ($32.70/ounce) gained 2.2 per cent last week. Similarly, in the domestic market, gold futures (₹96,518/10 gm) appreciated 4.2 per cent and silver futures (₹96,729/kg) went up by 2.8 per cent.

MCX-Gold (₹96,518)

Gold futures (June) rebounded last week, thereby making a higher low. However, it failed to move past ₹97,600 and this now appears to be an important barrier.

Also, note that last week’s rally did not see fresh participation by traders. In fact, the Open Interest (OI) saw a drop from 14,786 contracts on May 2 to 14,355 contracts on May 9.

Fresh buyers are expected to come in only if gold futures can surpass ₹97,600. In such a case, it can crossover the ₹1,00,000-mark and touch ₹1,01,420.

In case there is a drop from the current level, gold futures can find support at ₹94,200 and ₹92,000

Trade strategy: At the open on Monday, exit the gold futures long that we suggested at ₹93,800. Fresh longs can be considered post the breakout of ₹97,600.

MCX-Silver (₹96,729)

Silver futures (July) jumped last Tuesday. But since then, for the rest of the week, the contract was largely sideways and managed to post a weekly gain.

However, the price action shows too much noise, and the direction of the short-term trend is ambiguous. Like in gold futures, in silver futures, the OI decreased over the last week from 18,227 contracts to 16,038 contracts.

As per the chart, the nearest support and resistance levels of significance are ₹93,600 and ₹99,250 respectively. Silver futures might consolidate between these two levels for the short-term.

Trade strategy: Refrain from trading as the direction of the trend is unclear.

Published on May 10, 2025