The gold futures contract traded on the Multi Commodity Exchange (MCX) has been facing resistance in the ₹27,600-27,650 per 10 gm zone over last two weeks. The contract has declined after recording a high of ₹27,640 on Tuesday last week. Strong dollar which pulled the global spot gold ($1,231 per ounce) lower caused the fall in the domestic MCX-gold futures contract price as well.

The global spot gold price has immediate supports at $1,225 and $1,220. There is no sign of any danger for a sharp and immediate fall as long as gold trades above these levels. An upward reversal in the coming days can take the price to $1,250 levels once again this week. On the other hand, declines below $1,220 can increase the downside pressure and pull the gold price lower to $1,200. The outcome of the US Federal Reserve meeting on Wednesday will be a key trigger that could set the short-term trend for gold price.

On the domestic front, the MCX-gold futures contract has key support at ₹27,000 – the 21-day moving average level. The probability is high for the contract to reverse higher from this support. Traders with short-term perspective can go long with a stop-loss at ₹26,800 for the target of ₹27,700.

The outlook for the MCX-gold futures contract will turn negative if the contract records a strong close below ₹27,000. The next targets will be ₹26,650 and ₹26,400.

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

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