gold
The gold futures contract traded on the Multi Commodities Exchange (MCX) has tumbled over 3 per cent in the past week. The strong US jobs data release on Friday triggered a sharp sell-off in the global spot gold ($1,242/ounce).
The global spot gold has decisively broken its 200-day moving average at $1,251. It also has a key resistance at $1,260. So any bounce in the price could be thwarted by these resistance levels.
Having said this, a fall to $1,200 looks likely in the short-term.
On the domestic front, the MCX-gold futures contract has inched up and is trading near ₹26,950/10 gm.
The contract lacks momentum and is expected to remain under pressure. Immediate resistance is at ₹26,100 and then at ₹27,305 – the 200-day moving average level. Rallies to these resistances could attract fresh selling interest.
The outlook is bearish. A break below the immediate support at ₹26,750 can trigger a fall to ₹26,500 or even ₹26,000 in the coming days.
Traders with a short-term perspective can go short at current levels. Stop-loss can be placed at ₹27,350 for the target of ₹26,350.
The downside pressure will ease only if the MCX-gold futures contract records a strong break and closes above ₹27,500. But such a strong rise looks unlikely in the near term.
Note: The recommendations are based on technical analysis. There is a risk of loss in trading.
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Published on February 9, 2015
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