Last week, the gold futures contract traded on the Multi Commodity Exchange (MCX) took support at ₹28,500 per 10 gm and bounced up gaining 2.7 per cent to close at ₹29,387. This rally was triggered by a surge in global price which advanced 2.6 per cent to $1,244 per ounce as dollar index slumped 1.4 per cent in the previous week. Back on the domestic front, the MCX gold climbed 1.8 per cent on Friday breaching the key resistance at ₹29,000 and also settled above its 50-day moving average. Keeping this bullish momentum intact, the contract advanced marginally on Monday to trade at ₹29,438. The indicators and oscillators in the daily chart have started trending higher. The contract can now extend its rally to the immediate key resistance level of ₹30,000. Traders with a short-term view can make use of declines to buy the contract while maintaining a stop-loss at ₹29,100 for the target of ₹30,000. An emphatic breakthrough of ₹30,000 is needed to reinforce the medium-term uptrend and take the contract higher to ₹30,500 in the coming weeks. Conversely, a decisive fall below the immediate support at ₹29,000 can pull the contract down to the next support levels at ₹28,820 and then to ₹28,500.
On the global front, the spot gold price ($1,244/ounce) took support at $1,200 and gained 2.6 per cent in the prior week. This rally has breached an immediate resistance at $1,230 levels. Next resistances are at $1,260 and $1,280. Supports are at $1,230, $1,215 and $1,200.
Note: The recommendations are based on technical analysis. There is a risk of loss in trading.