The short-term outlook for the gold futures contract traded on the Multi Commodity Exchange (MCX) is bearish. The contract has been declining continuously over the last two weeks from its high of ₹27,685 per 10 gm recorded on May 15. It is currently trading near ₹26,730. Although there is an immediate support at ₹26,650, the contract looks vulnerable to break it. The weekly chart has turned more bearish in the short-term with key resistances at ₹26,900 and ₹27,000. As long as the contract trades below these hurdles, there is a strong possibility to break the support at ₹26,650.

Such a break can drag the contract lower to ₹26,000 and ₹25,800.

Short-term traders can go short. Stop-loss can be kept at ₹27,150 for the target of ₹26,100. Intermediate rallies to ₹27,000 can be considered to accumulate short positions.

The downside pressure for the contract will ease only if it records a decisive close above ₹27,000. Such a break can take it higher to ₹27,500 there after.

On the global front, the immediate outlook for the spot gold ($1,189/oz) price is unclear at the moment. The price has been hovering above its crucial support at $1,180 since Wednesday. A fall below ₹1,180 could be bearish. The price can then fall to $1,170. Further break below $1,170 will increase the danger of the price revisiting $1,150 there after.

On the other hand, if the contract gains momentum, then a rise to $1,200 and $1,210 is possible.

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

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