Gold tests major hurdle at Rs 56,850; Silver likely to play catch-up

The overall bias for Gold prices likely to remain bullish as long as Gold sustains above the Rs 55,700 - Rs 55,400 support zone. This week, Silver prices may look to retest the Rs 70,000-mark.

The MCX Gold and Silver futures exhibited a divergent trend so far in 2023, with the Gold prices gaining more than 3 per cent, while Silver declining over a per cent. As Gold prices have now reached their crucial yearly Fibonacci hurdle, Gold may look to consolidate or take a breather. 

Meanwhile, it seems like, Silver prices may play catch-up and revisit the Rs 70,000-mark this week.

Gold

Bias: Neutral

Last Close: Rs 56,658

Support: Rs 55,700; Rs 55,400

Resistance: Rs 56,850; Rs 56,900

The MCX Gold futures have reached their key yearly Fibonacci retracement level at Rs 56,850. Given the 3.3 per cent rally so far in 2023, Gold prices may look to consolidate or correct from current levels. Hence, one can adopt a wait and watch approach to get a clear signal.

Having said that, in case, Gold futures are able to conquer the Rs 56,850 hurdle, the yearly Fibonacci chart indicates next targets at Rs 58,200 - Rs 59,200 - Rs 60,175.

As per the quarterly Fibonacci chart, Gold futures have crossed the first hurdle and now seem placed to potentially test Rs 57,130 - Rs 57,785 - Rs 58,440 on the upside this March quarter.

The yearly technical chart too has witnessed a positive crossover on the MACD (Moving Average Convergence Divergence) - a key momentum oscillator. Thus, raising the possibility of the positive bias to sustain for a long duration. The chart indicates that the bullish bias shall be sustained as long as Gold prices hold above Rs 55,400-level.

On the daily and the weekly charts, Gold futures are seen trending along the higher-end of the Bollinger Bands. Break and trade above Rs 56,900 can add momentum to the upside. Whereas, on the downside, the 20-DMA (Daily Moving Average) at Rs 55,700-odd level is likely to be the key support level.

Accordingly to the weekly Fibonacci chart, this week, the MCX Gold February futures are likely to seek support around Rs 56,500 - Rs 56,380 - Rs 56,200, and on the upside the contract is expected to face resistance around Rs 56,820 - Rs 56,935 - Rs 57,110.

On Monday, the MCX Gold February futures contract may seek support around Rs 56,550 - Rs 56,515 - Rs 56,480, while on the upside the contract may counter resistance around Rs 56,770 - Rs 56,800 - Rs 56,840.

Similarly, the MCX Gold Mini February futures are expected to seek support around Rs 56,470 - Rs 56,440 - Rs 56,405, and on the upside the contract could face resistance around Rs 56,670 - Rs 56,700 - Rs 56,730 today.

Silver

Bias: Neutral

Last Close: Rs 68,547

Support: Rs 68,000

Resistance: Rs 70,250

The MCX Silver futures have fairly underperformed so far this year, with a 1.2 per cent as against the 3.3 per cent gain in Gold prices. 

The daily chart suggests that Silver prices may do some catch-up in the near term as long as it Rs 68,000-level holds. On the upside, Silver prices can spurt to Rs 70,250-level. 

For further strength, Silver will need to trade and close above the Rs 70,250-level.

As per the weekly chart, Silver prices have broadly consolidated in a trading band of Rs 66,700 to Rs 71,100 in the last six weeks. 

Among the key momentum oscillators, the ADX (Average Directional Index) is showing signs of firming-up, which would mean a stronger directional move on the given day.

According to the weekly Fibonacci chart, the MCX Silver March futures may swing in a trading range of Rs 66,900 to Rs 70,200 this week, with support expected around Rs 67,965 - Rs 67,535 - Rs 67,220. On the upside, the counter could face resistance around Rs 69,130 - Rs 69,560 - Rs 69,875.

On Monday, Silver March futures are likely to seek support around Rs 68,240 - Rs 68,145 - Rs 68,050, while on the upside the contract may counter resistance around Rs 68,855 - Rs 68,950 - Rs 69,050.

Similarly, MCX Silver Mini February futures could seek support around Rs 68,370 - Rs 68,290 - Rs 68,200; whereas on the upside the Mini contract may face resistance around Rs 68,925 - Rs 69,010 - Rs 69,100 today.

Further, the MCX Silver Micro February futures are likely to seek support around Rs 68,215 - Rs 68,085 - Rs 67,955; whereas the contract could face resistance around Rs 69,050 - Rs 69,175 - Rs 69,300 on Monday.