The gold futures contract traded on the Multi Commodity Exchange (MCX) failed to gain strength to breach the resistance at ₹31,500 per 10 gm. The contract fell 1.3 per cent over last week to close at ₹30,990. It is currently trading at ₹30,955. Immediate support is at ₹30,650. A break below this level can take the contract lower to ₹30,400. Both the 100-day moving average as well as a trendline support are poised at around ₹30,400 which makes that level very crucial to watch in the coming days. A strong break below this support can pull the contract lower to ₹30,000. It will also increase the danger of the contract tumbling even to ₹29,500 and ₹29,300 thereafter.

On the other hand, if the MCX gold futures contract manages to reverse higher from ₹30,400, a bounce to ₹30,650 is possible. A strong break above ₹30,700 will ease the downside pressure and can take it further higher to ₹31,300 and ₹31,500 thereafter. Traders can wait on the sidelines at the moment.

On the global front, the spot gold ($1,320 per ounce) fell 1.5 per cent in last week. The yellow metal is continuing to trade under pressure after the US Federal Reserve Chair Janet Yellen’s Jackson Hole speech on Friday hinted for an increased possibility of one more rate hike this year. Key supports are in then between $1,300 and $1,305 and then at $1,290. Though a test of these supports looks likely in the near term, whether the price reverse higher or declines further below these supports will decide the next leg of move.

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

Related Topics
comment COMMENT NOW