Gold may enter short-term corrective phase, test Rs 52,000-level

On the upside, Gold futures need to break and sustain above Rs 55,230 in order to negate the likely corrective move. Meanwhile, Silver futures seem on course to test Rs 72,000.

The MCX Gold and Silver futures finished the year 2022 with gains of 14.3 per cent and 10.8 per cent respectively. Going ahead, while the bias for Silver futures remains positive, Gold futures may see a corrective move given the persistent resistance above the Rs 55,000-mark.

The Rs 55,230 is the key level to watch out for on Gold futures in the coming week.

Gold

Bias: Short-term correction likely

Last Close: Rs 55,017

Target: Rs 52,000

Support: Rs 54,450

Resistance: Rs 55,230; Rs 55,350

The year 2022 was a good year for Gold, with prices climbing over 14 per cent during the course of the year; this came back after a 4 per cent fall in the preceding year 2021.

However, despite the gains, time and again Gold futures have witnessed notable resistance above the Rs 55,000-mark. Last week, the MCX Gold futures did manage to close above the Rs 55,000-mark, but a closer look at the charts indicate that Gold futures were seen consistently facing resistance around the higher-end of the Bollinger Bands on the weekly chart, the same now stands at Rs 55,230 level.

Even as the RSI and MACD seem to be favourable on the weekly chart, the Slow Stochastic and ADX index are suggesting a possibility of a pause or short-term pullback in Gold prices. 

Going ahead, in case, Gold futures fail to cross and sustain above the Rs 55,230-level, a corrective move towards Rs 52,000-mark cannot be ruled out.

On the daily scale, immediate resistance and support for Gold is seen at Rs 55,350 and Rs 54,450, which is the 20-DMA. Sustained trade below Rs 54,450 is further likely to favour the likely corrective move.

On the longer time-frame, the yearly Fibonacci chart indicates a likely trading range of Rs 49,850 to Rs 60,175 for Gold prices in 2023. In January, MCX Gold February futures can swing in a range of Rs 53,450 to Rs 56,580, the monthly chart suggests.

According to the weekly Fibonacci chart, this week the MCX Gold February futures are likely to trade in a range of Rs 54,500 to Rs 55,550; with the Gold prices expected to seek support around Rs 54,830 - Rs 54,700 - Rs 54,600, and may face resistance around Rs 55,200 - Rs 55,340 - Rs 55,440.

On Monday, the MCX Gold February futures contract is likely to seek support around Rs 54,915 - Rs 54,885 - Rs 54,855, while on the upside the contract may counter resistance around Rs 55,120 - Rs 55,150 - Rs 55,180.

Similarly, the MCX Gold Mini January futures may seek support around Rs 54,650 - Rs 54,600 - Rs 54,560, and on the upside the contract could face resistance around Rs 54,915 - Rs 54,955 - Rs 55,000 today.

Silver

Bias: Positive

Last Close: Rs 69,413

Target: Rs 72,000

Support: Rs 68,450

Resistance: Rs 71,000

Silver futures witnessed a volatile ride in 2022, with prices falling as much as 17.7 per cent during the year, before rebounding in the last four months. Silver futures eventually ended the year with a gain of 10.8 per cent, thanks to the sharp 32 per cent rally in the last four months.

As per the monthly chart, Silver prices seem to be on course to test the Rs 72,000 level, and a move beyond that during the course of the New Year also seems likely. The yearly Fibonacci chart indicates a likely trading range of Rs 56,100 to Rs 82,700 for Silver prices in 2023. The indicative range as per the monthly chart is Rs 64,885 to Rs 73,940.

However, select momentum oscillators on the weekly chart seem to be overheated. Hence, some consolidation in the near term cannot be ruled out. To reaffirm the same; the MACD on the daily chart has already given a negative divergence.

The daily chart indicates near-term resistance for Silver around Rs 71,000-level, with immediate support seen at the 20-DMA at Rs 68,450 level. Break and sustained trade below the 20-DMA, can result into a corrective move towards Rs 66,000 level or further lower to Rs 64,250 level.

According to the weekly Fibonacci chart, the MCX Silver March futures this week may swing in a broad range of Rs 68,100 to Rs 70,730. Silver prices are likely to seek support around Rs 68,940 - Rs 68,600 - Rs 68,350, while resistance can be expected around Rs 69,880 - Rs 70,230 - Rs 70,480.

On Monday, Silver March futures may seek support around Rs 68,920 - Rs 68,770 - Rs 68,615, while on the upside the Silver contract may counter resistance around Rs 69,900 - Rs 70,060 - Rs 70,210.

Similarly, MCX Silver Mini February futures could seek support around Rs 68,910 - Rs 68,770 - Rs 68,630; whereas on the upside the Mini contract may face resistance around Rs 69,815 - Rs 69,955 - Rs 70,100 on Monday.

Further, the MCX Silver Micro February futures are likely to seek support around Rs 68,910 - Rs 68,775 - Rs 68,640; whereas the contract could face resistance around Rs 69,800 - Rs 69,930 - Rs 70,065 today.