The sharp seven per cent rally on Friday in the gold futures contract traded on the Multi Commodity Exchange (MCX) has boosted the bullish momentum. The outcome of the UK referendum deciding to exit the European Union jolted the global financial markets and triggered a sharp sell-off in the risky assets. As a result, gold gained sheen on haven status and surged on Friday. On the global front, the spot gold price sky-rocketed seven per cent to $1,358 per ounce before settling down four per cent up on Friday at $1,315.

The MCX-gold futures contract continues to trade higher on Monday as well. It is currently trading at ₹31,600 per 10 gm. Immediate support is at ₹31,000 and then a strong support is in between ₹30,500 and ₹30,300. The downside is expected to be limited to ₹30,300 in the near-term if the contract declines below ₹31,000. A rise to test ₹32,000 is possible in the near-term. A strong break above ₹32,000 can take the contract higher to ₹33,000 or even ₹33,300 thereafter. Traders with a short-term perspective can make use of dips to go long near ₹31,000. Stop-loss can be placed at ₹30,400 for the target of ₹32,000.

On the global front, the spot gold price ($1,325/ounce) has an immediate support at $1,320. A break below it can take the price lower to $1,300. But a reversal from $1,320 can take the bullion prices higher to $1,350 and $1,360 in the coming days.

Note: The recommendations are based on technical analysis. There is a risk of loss in trading.

Related Topics