Indian gold investors smile

Readers who followed us last week would have made gains. Both gold and silver futures hit our upside targets as predicted. With FIIs pulling out money from the equity market, rupee lost its fort and dropped below 62 against the greenback. This helped precious metals denominated in dollars move up.

Rupee closed at 62.29, from 61.78 in the previous week.

The gold futures contract on MCX hit our upside target of ₹27,000 and closed the week at ₹27,209. The contract ended making a gain of three per cent. Those who closed the contract at our target price would have made a gain of 2.4 per cent. MCX Silver futures closed the week at ₹38,707, just right above our target of ₹38,700, making a profit of 6 per cent.

This week again, it looks like rupee may weaken further and move towards 63 levels. So, longs are less risky than shorts on both gold and silver futures.

MCX Gold (₹27,209) can move up to ₹28,000, if it cuts past the resistance at ₹27,400. If rupee supports, the contract can even go higher to ₹28,400 this week. However, if prices move south on negative news if any, the contract may drop to test the support at ₹26,600. On breaching the support, the contract will stop only at ₹26,000.

MCX Silver (₹38,707) has a strong resistance at ₹39,000 levels. If this cut, the contract can move to ₹41,300 this week. Downside, the support is at ₹36,500, to a target of ₹35,000.

MCX Gold

Resistance

₹27,400 and ₹28,200

Support

₹26,600 and ₹25,500

US data watch

Dec 15 – Industrial production

Dec 16 – Housing starts

Dec 17 – FOMC announcement

Dec 18 – Jobless claims

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