Key support for MCX Gold stands at Rs 55,900; Silver Rs 64,400

The weekly chart suggests, sustained break and trade below Rs 55,900, can trigger a fall in Gold futures towards the Rs 54,000 level.

The MCX Gold and Silver futures are seen testing support at the key moving averages on the daily and weekly scale. The immediate support level for MCX Gold April futures stand at Rs 55,930, which is the 50-DMA; Similarly, Silver futures is testing support at its 100-DMA placed at Rs 64,400.

Both the precious metals are seen trading below the short-term (20-DMA) which could act as the near-term hurdles.

Gold

Bias: Cautiously Positive

Last Close: Rs 56,257

Support: Rs 55,930

Resistance: Rs 56,940

Last week, the MCX Gold futures dipped around a per cent on profit-taking after Gold prices had scaled a record high of Rs 58,826 earlier this month. In the process, Gold futures also dipped below the 20-DMA (Daily Moving Average|) for the first time since early November 2022.

Given the steady up move in the last four months, the current dip in prices can be presumed as a corrective move, which in general is said to be a healthy sign for a sustained bull run.

Having said that, the MCX Gold futures are presently testing the key support level at its 50-DMA placed at Rs 55,930. This level is likely to act as a crucial support for the precious metal in the near-term. 

On the upside, Gold futures need to overcome the immediate hurdle at Rs 56,940 - its 20-DMA, in order to maintain the bullish stance. 

On the flip side, in case support at Rs 55,930 gets violated, Gold prices can dip towards the next key support placed at the 100-DMA, which indicates downside target of Rs 53,800.

Further, the weekly chart also indicates a possibility of Gold futures testing Rs 54,000-level in the process of the current corrective phase.

Accordingly to the weekly Fibonacci chart, this week, the MCX Gold April futures could swing in the range of Rs 55,500 to Rs 57,070; with support expected around Rs 55,750 - Rs 55,600, and resistance on the upside around Rs 56,750 - Rs 56,900.

On Monday, the MCX Gold April futures contract is likely to seek support around Rs 56,125 - Rs 56,030 - Rs 55,890, while on the upside the contract is expected to counter resistance Rs 56,485 - Rs 56,555 - Rs 56,625.

Similarly, the MCX Gold Mini March futures are expected to find support around Rs 56,100 - Rs 56,000 - Rs 55,850, and on the upside the contract could meet resistance around Rs 56,365 - Rs 56,465 - Rs 56,610 today.

Silver

Bias: Negative

Last Close: Rs 65,631

Target: Rs 61,100

Support: Rs 64,400; Rs 63,800

Resistance: Rs 67,620; Rs 68,365

Silver futures have been on a gradual decline after testing a high at Rs 72,769 at the start of the month. The white metal has so far shed 11.5 per cent from its peak in the following 11 trading sessions.

The overall bias for Silver futures is negative, as the commodity is trading below the 20-DMA and 50-DMA. Further, the 20-DMA at Rs 67,620 is below the 50-DMA at Rs 68,365. 

The MCX Silver futures is currently testing support around its 100-DMA placed at Rs 64,400. As long as this support holds, Silver futures may look to pullback towards the short-term moving averages. 

However, in case, the 100-DMA support breaks Silver futures are likely to test the 200-DMA placed at Rs 61,100-odd level.

As per the weekly chart, despite five weeks of straight fall Silver futures have so far managed to sustain above the 20-WMA (Weekly Moving Average), now placed at Rs 64,500. Thus, this particular level becomes a key support as it coincides with the 100-DMA.

On the weekly scale, the next near support for Silver prices is seen at Rs 63,800 in the form of its 100-WMA, followed by Rs 62,160 its 50-WMA.

Key momentum oscillators on the daily chart remain in favour of the bears. Further, the MACD on the weekly scale is also on the verge of turning negative. Thus, we may see a prolonged phase of underperformance by Silver.

The ideal strategy for traders in Silver should be to consider selling the contract on rise, with a stop at its 20-DMA on a closing basis. 

According to the weekly Fibonacci chart, the MCX Silver March futures, this week, may swing in a broad range of Rs 64,225 to Rs 67,035, with support likely around Rs 65,130 - Rs 64,760 - Rs 64,500. On the upside, the contract may face resistance around Rs 66,130 - Rs 66,500 - Rs 66,770.

On Monday, Silver March futures may test support around Rs 65,140 - Rs 65,000 - Rs 64,840, while on the upside the precious metal may face resistance around Rs 65,900 - Rs 66,120 - Rs 66,425.

Similarly, MCX Silver Mini February futures could seek support around Rs 66,400 - Rs 65,270 - Rs 65,135; whereas on the upside the Mini contract may face resistance around Rs 66,100 - Rs 66,285 - Rs 66,555 today.

Further, the MCX Silver Micro February futures are likely to seek support around Rs 65,415 - Rs 65,280 - Rs 65,145; whereas the contract could counter resistance around Rs 66,100 - Rs 66,290 - Rs 66,560 on Monday.