Gold futures contract traded on the Multi Commodity Exchange (MCX) fell more than 1 per cent amid choppiness to close at ₹29,691 per 10 gm last week . With this fall, the contract has decisively breached below the key psychological ₹30,000-mark.

On Monday, the contract marginally declined by ₹31 to trade at ₹29,660. But the contract has a key immediate support at ₹29,500 and then vital short-term trend-deciding level is at ₹29,200. As long as the contract trades below the immediate resistance level at ₹30,000 the selling pressure will continue and the possibility of testing ₹29,200 is high. The daily price rate of change indicator is featuring in the negative terrain implying selling pressure.

Moreover, the daily moving average convergence divergence and relative strength index are also charting downwards signalling selling pressure. Traders with short-term perspective can sell the contract with a stop-loss at ₹30,050. Targets are ₹29,200 or even to ₹29,000. An emphatic fall below the significant support level of ₹29,000 will strengthen the downtrend and drag it down to ₹28,750.

On the other hand, a decisive breakthrough of ₹30,000 can bring back bullish momentum and take the contract higher to ₹30,500 and then to ₹31,000 in the short-term. The medium-term uptrend that started in January will be in place as long as the contract trades above the key support level at ₹27,500.

On the global front, the spot gold price slumped 1.7 per cent to $1,251.9/oz last week . Extending this downtrend, the contract fell 0.3 per cent to $1,248.6. Spot gold has breached a key support at $1,260 and is now trending down to $1,240. Strong fall below this level can pull the prices down to $1,220. Significant resistances are at $1,260, 1,277 and 1,300.

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