Gold can rise 5% to Rs 75,000; Silver by 2.5% to Rs 85,000, charts suggest

The MCX Gold futures have scaled new highs in the last 9 trading sessions, and surged 8.5 per cent. Charts suggest some consolidation likely ahead, as technical indicators are in overbought zone.

Commodities such as Gold and Silver have rallied sharply in the last two weeks amid rise in geopolitical crisis and hopes of interest rate cut in the US.

Gold futures in the international market, rallied from $2,170 per ounce to $2,384 per ounce - up 9.9 per cent in the last three weeks. Meanwhile, Silver futures outperformed with a gain of 16 per cent during the same period. 

Analysts attribute the recent gains to sustained demand for Gold by global central banks, as the supply remains limited. 

Praveen Singh, Associate VP, Fundamental Currencies and Commodities at Sharekhan by BNP Paribas, said China's PBoC (Public Bank of China) bought Gold for the 17th month in a row in March. Overall, global central banks added to their gold reserves in February for the ninth straight month. Central banks, especially PBoC, buying Gold remains a key factor supporting the rally. 

In the Indian context, the MCX Gold June futures have rallied 8.5 per cent (Rs 5,640) in the last nine straight trading sessions, having scaled a new high in each of these trading sessions. The precious metal has surged almost 15 per cent since the end of February 2024, and hit multiple new highs during this period. 

On Wednesday, Gold prices are likely to be influenced by Federal Reserve's policy meeting minutes and the US inflation data, with geopolitical risks influencing its trajectory, says Prathamesh Mallya, DVP Research Commodity & Currency, Angel One Ltd.

Despite its reputation as a hedge against inflation and geopolitical risks, gold's allure may wane in the face of higher interest rates, as it is a non-yielding asset, the analyst added.

So, given this backdrop, will the rally in Gold prices continue unabated, or will it take a breather? Here's what the charts suggest.

MCX Gold June

Current Price: Rs 71,480

Bias: Consolidation likely

Support: Rs 69,200; Rs 67,700; Rs 66,900

Resistance: Rs 71,900

Likely level: Rs 72,900; Rs 75,000
Likely upside: 5%

Given the sharp rally, key momentum oscillators for MCX Gold are in overbought zone on the daily and weekly time-frames. The rally is expected to take a breather, with prices consolidating in the near-term.

The quarterly Fibonacci chart suggests that the MCX Gold futures could face resistance around Rs 71,900 levels.

Having said that, the overall trend for Gold is extremely bullish on charts, with Gold prices trading above key moving averages across time-frames. The daily chart suggests, that in case of dip, MCX Gold futures could seek support around its 20-DMA (Daily Moving Average) which stands at Rs 67,700-odd levels.

Similarly, the yearly Fibonacci chart shows that the Gold prices are likely to trade on a buoyant note for the rest of the year, as long as prices sustain above Rs 66,900 levels. On the upside, Gold can rally to Rs 72,900 levels, above which the next significant target would be Rs 75,000.

For now, Gold futures are expected to consolidate in the Rs 71,900 - Rs 69,200 levels, with key support seen around Rs 67,700 and Rs 66,900.

MCX Silver May

Current Price: Rs 82,900

Bias: Positive

Likely target: Rs 85,000
Likely upside: 2.5%

Support: Rs 82,700; Rs 80,500

Resistance: Rs 83,050; Rs 83,150

The MCX Silver May futures are expected to trade on a bullish note as long as the commodity holds above its near support at Rs 82,700 level. Overall, the short-term trend is expected to favour the bulls as long as prices remain above Rs 80,500. On the upside, Silver futures can rally to Rs 85,000 levels, with interim resistance seen around Rs 83,050 and Rs 83,150.

In case, support at Rs 80,500 levels fails to hold, the commodity could witness a price-correction up to its 20-DMA at Rs 77,100 levels.