Gold prices remained range-bound and volatile in the past week. The global spot gold prices rose to a high of $1,355 per ounce, but fell thereafter, giving back all the gains. The prices have closed at $1,336 per ounce, down 0.7 per cent for the week. But the case for silver was different as the prolonged sideways range movement came to an end. After several weeks of under-performance, silver outperformed gold last week.

The global spot silver prices surged, breaching the crucial level of $16.9 per ounce, and made a high of $17.35. However, the prices came off slightly from this high, to close the week 2.8 per cent higher at $17.12 per ounce.

On the domestic front, weak rupee helped domestic futures contracts to remain strong despite weak global prices at the end of the week. The MCX-Gold has closed at ₹31,432 per 10 gm, up 1 per cent for the week. The MCX-Silver contract surged about 4 per cent to close the week at ₹31,432 per kg.

Tensions to ease

The geo-political development over the weekend may result in a weak beginning for bullion this week. North Korea’s decision to suspend further nuclear tests may ease the tension in the market and trigger a strong rally in risky assets. This may keep the bullion prices subdued for some time.

Gold outlook

The global spot gold ($1,336 per ounce) retains its broad $1,300-$1,370 sideways range. Within this range, the near-term view is negative. As long as gold remains below $1,341, a dip to $1,326 is likely. A break below $1,326 will then drag the prices to $1,320 or even $1,310 thereafter. The downside pressure will ease only if gold breaks above $1,341 decisively. Such a break can take it back to $1,355 and $1,360 levels again.

The MCX-Gold (₹31,432 per 10 gm) has key supports at $31,330 and ₹31,000 which can limit the downside. A rally to ₹32,000 is likely . The outlook will turn negative only if the contract breaks decisively below ₹31,000, which looks less probable at the moment.

Silver outlook

The global spot silver ($17.12 per ounce) can dip to test the key $16.9-$16.85 support region. But a break below $16.85 looks less probable. An upward reversal from this support zone can take silver higher to $17.30 or even $17.50 . A strong break above $17.5 will pave the way for the next target of $17.90.

MCX-Silver (₹40,479 per kg) has a support at ₹40,100 and resistance at ₹40,750. A break-out from either of these levels will determine the next move. A below ₹40,100 can drag it to ₹39,500. On the other hand, a strong break above ₹40,750 will take it higher to ₹41,200 and ₹41,500 .

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