The gold futures contract traded on the Multi Commodity Exchange (MCX) has been stuck in a sideways range between ₹30,800 and ₹31,500 per 10 gm over the last three weeks.

The contract made a high of ₹31,380 on Thursday and has come off from there. It is currently trading near ₹31,260.

A strong rupee is capping the upside and has been keeping the contract in a sideways range in the last few weeks. Traders can stay out of the market until the range breakout confirms the next trend and gives a clear trade signal.

The MCX futures contract can test the ₹31,000-30,800 support zone in the near-term. A reversal from this zone will keep the sideways range intact and take the contract higher to ₹31,500 once again.

A strong break above ₹31,500 will boost the bullish momentum and take the contract higher to ₹32,000 and ₹32,500 thereafter.

The 100-day moving average around ₹30,700 is a key support. The contract may come under immense pressure if it breaks below this support decisively.

Such a break can take the contract lower to ₹30,500 immediately. A further break below ₹30,500 will drag it to ₹30,000 or ₹29,800 thereafter.

On the global front, the spot gold price has been range-bound between $1,300 and $1,350 an ounce over the last month. A breakout on either side of this range will decide the next leg of movement.

On the charts, $1,300 looks like a very strong support that leaves the bias positive for gold prices to break above $1,350 and surge to $1,375 or even higher.

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

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