Gold rally may take a breather, support at Rs 59,750 holds key

The MCX Gold June futures could dip to Rs 58,300 or lower, in case the support at Rs 59,750 gets violated; Pivot point for Silver is Rs 74,850.

The MCX Gold and Silver futures recently hit record highs at Rs 61,399 and Rs 77,549, respectively. Given the steep rally profit-taking at higher levels seems logical. However, post Friday's profit-taking charts indicate a mixed picture for the precious metals.

While Gold futures seem to have indicated that corrective phase may begin soon, the MCX Silver futures have managed to hold the bias fairly in favour of the bulls for now.

Here are the key levels to be watched out on the MCX Gold and Silver futures in the near-term.

Gold

Bias: Consolidation

Last Close: Rs 60,348

Resistance: Rs 60,800; Rs 61,300

Support: Rs 59,750

Gold prices have witnessed an astounding rally of around 25 per cent in the last six months from levels of Rs 49,000 to a high of Rs 61,399. In the last two weeks, prices seem to be taking a breather around the Rs 61,000 level.

As per the daily chart, the MCX Gold futures are likely to face resistance around Rs 60,800 and Rs 61,300 on the upside, which are the higher-end of the Bollinger Bands on the weekly and daily scale, respectively.

On the other hand, near-term support for Gold futures is expected around the 20-DMA (Daily Moving Average) placed at Rs 59,750-odd level. In case, the 20-DMA is violated on a consistent basis, Gold prices can witness an intermittent correction towards Rs 58,300 - Rs 57,700 levels.

Praveen Singh, AVP, Fundamental currencies and Commodities analyst at Sharekhan by BNP Paribas expects Gold to test support at $1975 followed by $1950. On the upside he sees resistance for Gold at $2020, followed by $2035.

Among the key momentum oscillators, the MACD (Moving Average Convergence-Divergence) on the daily chart is showing signs of some tiredness. A negative divergence on the same, could confirm the likely price corrective phase for MCX Gold.

As per the weekly Fibonacci chart, the MCX June Gold futures are likely to trade in a range of Rs 59,450 - Rs 61,250; with support expected around Rs 60,025 - Rs 69,790 - Rs 59,620 and resistance likely around Rs 60,670 - Rs 60,900 - Rs 61,075.

On Monday, the MCX Gold June futures could seek support around Rs 60,110 - Rs 59,935 - Rs 59,800, while on the upside the contract may counter resistance around Rs 60,585 - Rs 60,760 - Rs 61,000.

Similarly, the MCX Gold Mini May futures are expected to seek support around Rs 59,940 - Rs 59,765 - Rs 59,515, and on the upside the contract may face resistance around Rs 60,400 - Rs 60,580 - Rs 60,830.

Silver

Bias: Positive

Last Close: Rs 75,665

Pivot Point: Rs 74,850

Target: Rs 80,300

Support: Rs 72,130; Rs 68,400

The MCX Silver futures look fairly bullish on the daily charts, with prices rallying closer to the higher-end of the Bollinger Bands. However, key momentum oscillators are in overbought zone, hence an intermittent correction cannot be ruled out.

The higher-end of the Bollinger Bands on the daily scale, indicate some resistance for Silver futures around Rs 77,570 level. On the contrary, the MCX Silver May futures are placed above the higher-end of the Bollinger Bands on the weekly scale, which stands at Rs 74,850. This implies that the bulls are likely to have the upper hand as long as Silver continues to trade above Rs 74,850.

Sustained trade below the pivot point of Rs 74,850, can trigger a correction towards the 20-DMA at Rs 72,130 or a deeper dip towards the 20-WMA (Weekly Moving Average) placed around Rs 68,400 level.

Among the key momentum oscillators, the 14-day RSI (Relative Strength Index) and MACD are in overbought zone. Any negative divergence on either of them, could give early signs of a likely to corrective move.

As per the yearly Fibonacci chart, with a recent high at Rs 77,549 Silver futures have given a minor Buy signal for the calendar year 2023. In case of dips hereafter, Silver futures are likely to seek support around Rs 72,200 - Rs 67,550 range in the remainder of the year. On the upside, MCX Silver prices can target the next hurdle at Rs 80,300 level.

This week, the MCX Silver May futures may swing in a wide range of Rs 73,500 - Rs 77,825; with support likely around Rs 74,900 - Rs 74,330 - Rs 73,900, while on the upside the contract may counter resistance around Rs 76,430 - Rs 77,000 - Rs 77,400.

On Monday, Silver May futures are likely to seek support around Rs 75,155 - Rs 74,780 - Rs 74,235, while on the upside the contract may face resistance around Rs 76,175 - Rs 76,550 - Rs 77,100.

Similarly, MCX Silver Mini April futures could seek support around Rs 75,065 - Rs 74,700 - Rs 74,150; whereas on the upside the Mini contract may counter resistance around Rs 76,065 - Rs 76,435 - Rs 76,975 today.

Further, the MCX Silver Micro April futures are likely to seek support around Rs 75,045 - Rs 74,675 - Rs 74,130; whereas the contract could counter resistance around Rs 76,055 - Rs 76,430 - Rs 76,970 on Monday.