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Gold futures traded on the Multi Commodity Exchange are stuck in a narrow range around the psychological ₹27,000-per-10-gm level. The contract witnessed a sharp rise on Friday following rumours that China could announce more stimulus package.
This saw the global spot gold price ($1,193/oz) surging to a high of $1,199 from a low of $1,176.5 on Friday. Prices are currently hovering below $1,200. A strong break above this psychological level is required to takes prices higher to $1,210 and $1,220. But inability to breach $1,200 and a reversal from this level can take spot prices down to $1,185 and $1,170 or even lower levels in the coming days.
On the domestic front, MCX gold futures are not gaining momentum and are unable to extend their sharp rally on Friday. The contract is stuck around ₹27,000 in a narrow range. The immediate outlook is not clear. There is a 50-50 chance of a rise to ₹27,500 or a fall to its support at ₹26,500 in the coming days. So traders can wait on the sidelines for now, celebrate the New Year and come back afresh next week to take positions.
A breakout on either side of ₹27,500 or ₹26,500 will decide the next trend for the MCX-gold futures contract.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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