Last week, the gold futures contract traded on the Multi Commodity Exchange (MCX) rose ₹290 or almost 1 per cent to ₹29,946 per 10 gm. This upmove appears to be a corrective rally of the contract’s recent sharp fall from the high around ₹31,350 . But the key resistance at ₹30,000 is limiting this corrective rally.

On Monday, witnessing selling pressure the contract slipped ₹90 or 0.3 per cent to trade at ₹29,856. It currently tests its 200-day moving average at ₹29,850. Thereafter, the contract has a vital support in the band between ₹29,300 and ₹29,500 which can cushion the downside.

However, a decisive downward breakthrough of this support zone will strengthen the contract’s medium-term downtrend that commenced from the early July peak of ₹32,455. Next key supports below ₹29,300 are at ₹29,000 and ₹28,750. Moreover, the short-term trend is also down for the contract.

Traders with a short-term perspective can initiate fresh short positions if the contract reverses down from the immediate resistance at ₹30,000 while maintaining a stop-loss at ₹30,250. Targets are ₹29,500 and ₹29,300.

On the other hand, an emphatic breakthrough of ₹30,000 will see the corrective rally extending to ₹30,300 and ₹30,500 . Strong breach of the key resistance at ₹30,500 is needed to alter the short-term downtrend and take the contract northwards to ₹30,750 and ₹31,000 in the short-term.

On the global front, the spot prices made a corrective up move last week and rose $16 or 1.3 per cent to $1,266 per ounce. Significant resistances are at $1,280 and at $1,300. Strong breakthrough of $1,300 is needed to alter the short-term downtrend. A conclusive fall below the immediate support at $1,250 can pull the gold prices down to $1,235 and then to $1,225 in the short-term.

comment COMMENT NOW