The outlook for the gold futures contract traded on the Multi Commodity Exchange (MCX) is bullish despite the contract coming-off from Thursday’s high of ₹26,988 to the current levels of ₹26,265. Key supports are placed near ₹26,244 – the 50 per cent Fibonacci retracement level and then at ₹26,150 – the 21-day moving average level. There is a strong possibility of fresh buying interest coming into the market at these levels. A reversal from the above mentioned supports can take the contract to ₹26,650 and then to ₹27,000.

Short-term traders can go long at current levels. Stop-loss can be placed at ₹25,900 for the target of ₹26,650. Accumulate longs on dips to ₹26,150-₹26,000.

The outlook will turn bearish only if the contract records a decisive close below ₹25,950. Such a break will increase the chances of the contract revisiting ₹25,500.

On the global front the spot gold ($1,186 per ounce) has dropped sharply on Monday. However, there are a series of key supports coming up at $1,181, $1,179 and $1,177 which are likely to halt the current fall. A reversal from here can take the bullion price higher to $1,200 levels once again. The MCX-gold futures contract which moves in tandem with the global price is also expected to take cues from it.

The bullish outlook will get negated only if the spot price falls below $1,177. The ensuing target on such a fall will be $1,168.

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

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