Market Outlook: Gold and Silver Prices Extend Correction, Analysts Recommend ‘Buying on Dips’

The precious metals market is currently navigating a period of volatility as both gold and silver on the Multi Commodity Exchange (MCX) continue to face downward pressure. Following a lackluster performance last week, both commodities have opened the current week with an extension of that bearish momentum.

However, despite the short-term corrective phase, market experts suggest that the underlying structural trend remains positive. Investors are being advised to view the current price drop as an accumulation opportunity rather than a signal of a long-term trend reversal.

MCX Gold: Managing the Correction

According to Abhilash Koikkara, Head of Forex & Commodities at Nuvama Professional Clients Group, the current dip in gold prices is expected to continue through the upcoming sessions. With the metal trading at lower lows and breaking through previous weekly supports, momentum remains firmly on the negative side.

“While the intermediate bias is bearish heading into the week, the base trend remains robust,” says Koikkara. “Investors should focus on the crucial support level of Rs 148,000. A breach below this could trigger further correction toward Rs 144,000.”

On the upside, gold faces immediate resistance at the Rs 155,000 mark. Analysts note that a sustained daily close above this level would negate the current bearish bias and potentially signal a resumption of the primary bullish trend.

Current Trading Strategy for Gold:

• Current Market Price (CMP): Rs 150,300
• Target Price: Rs 144,000
• Stop Loss: Rs 155,000

For those looking for a comprehensive gold trading strategy, experts emphasize that “buying on dips” remains the most advisable approach for traders aiming to capitalize on the broader positive trend.

MCX Silver: Consolidation Amid Volatility

Silver is mirroring the sentiment seen in the gold market, having retreated from its August highs and logging two consecutive weeks of losses. The metal is currently trapped in a wide consolidation range, with technical indicators suggesting that a further move toward mid-August price zones is likely.

The key level to watch for silver is Rs 225,000, which is being identified as a strong support zone. As long as the price holds above this level, the broader uptrend is considered intact. A firm close below this mark, however, would likely shift the bias toward a deeper negative trend.

Silver Price Forecast:

• Resistance Levels: Immediate resistance is pegged at Rs 242,000, with a secondary hurdle at Rs 246,000.
• Trading Strategy:
  • CMP: Rs 233,200
  • Target: Rs 225,000
  • Stop Loss: Rs 240,000

While the short-term outlook for silver remains cautious, the anticipated bounce from lower levels suggests that the current correction is a temporary phase in an otherwise bullish long-term narrative.

Disclaimer: The recommendations and views provided by market analysts are their own and do not reflect the opinions of this publication. Investors are advised to consult with professional financial advisors before making investment decisions.