Upside for MCX Gold seems capped near Rs 51,100; Silver may pullback

The MCX Gold October futures were seen testing support around the 200-DMA; while select momentum oscillators indicate a likely pullback for Silver futures.

The MCX Gold futures were seen testing support around the 200-DMA on the daily chart, while the Silver futures broke and close below the 50-WMA last week. Overall, the upside seems capped for Gold, with potential downside to Rs 48,900-level; while Silver may pullback owing to oversold conditions on the daily chart.

Gold

Bias: Neutral

Last Close: Rs 50,384

Support: Rs 49,880

Resistance: Rs 51,100

The MCX Gold futures cracked sharply in trades last week and were seen testing the 200-DMA (Daily Moving Average) on the chart, placed at Rs 50,300-odd level. In fact, last week, Gold futures tested the 50-WMA (Weekly Moving Average) at 49,880-odd level and then pulled back considerably to end the week at Rs 50,384.

Going ahead, the near term support at Rs 50,300 and Rs 49,880 levels are likely to be the key levels to watch out. The key momentum oscillators, both, on the daily and the weekly charts are negative hence the bears are likely to have the upper hand for now.

In case, the 50-WMA support gets violated, Gold futures can drop towards the 100-WMA at Rs 48,900-odd level, below which the next significant support is around Rs 44,100-level its 200-WMA.

In the very near term, the upside for MCX Gold seems capped around Rs 51,100-odd level. Prices may move lower or drift sideways during the week.

As per the weekly Fibonacci chart, this week Gold October futures may trade in a broad range of Rs 49,465 to Rs 51,300; with support seen around Rs 50,055 - Rs 49,820 - Rs 49,640 and resistance expected around Rs 50,710 - Rs 50,950 - Rs 51,125.

On Monday, MCX Gold 1 kg futures are likely to seek support around Rs 50,280 - Rs 50,200 - Rs 50,090, while on the upside can face resistance around Rs 50,490 - Rs 50,565 - Rs 50,680.

Similarly, MCX Gold Mini futures for September expiry are likely to seek support around Rs 50,330 - Rs 50,280 - Rs 50,210; the contract may find resistance around Rs 50,455 - Rs 50,500 - Rs 50,570.

Silver

Bias: Negative

Last Close: Rs 52,475

Resistance: Rs 54,530

Support: Rs 51,300

Persistent weakness in Silver futures finally saw the counter close below the 200-WMA last week. The 200-WMA is placed at Rs 54,530 and the lower-end of the Bollinger Band on the daily chart is placed at Rs 52,330. These two are the key levels to be watched out on the downside in the near term.

Overall, key momentum oscillators remain in favour of the bears both on the daily and weekly charts. However, select momentum oscillators are showing some signs of exhaustion on the downside, hence some consolidation or pullback in prices can be expected. 

The ADX (Average Directional Index) in particular is showing signs of firming up. Hence, in case, there is a pullback rally, it could be a sharp one. Similarly, on the flip side, break and trade below Rs 51,300 and trigger a sharper slide.

According to the weekly Fibonacci chart, this week the MCX Silver September futures are likely to trade in a broad range of Rs 50,620 to Rs 54,330; with support likely around Rs 51,815 - Rs 51,330 - Rs 50,975. On the upside, Silver futures could face resistance around Rs 53,135 - Rs 53,620 - Rs 53,975.

On Monday, Silver futures may seek support around Rs 52,300 - Rs 52,170 - Rs 51,985, while on the upside the commodity could face resistance around Rs 52,650 - Rs 52,780 - Rs 52,965.

Similarly, MCX Silver Mini futures may seek support around Rs 53,490 - Rs 53,330 - Rs 53,090; while the Mini contract could face resistance around Rs 53,935 - Rs 54,100 - Rs 54,335 on Monday.

Further, the MCX Silver Micro futures are likely to seek support around Rs 53,570 - Rs 53,405 - Rs 53,165 and might face resistance around Rs 54,020 - Rs 54,185 - Rs 54,430 today.