The immediate outlook for gold futures traded on the Multi Commodity Exchange (MCX) is unclear.
The contract is stuck within a narrow range of ₹26,700 per 10 gm and ₹27,100 since May 5.
A breakout of this range will decide the next leg of move for the contract.
Traders can stay on the sidelines until a clear trade signal emerges and take positions accordingly.
A break below ₹26,700 can drag the contract lower to ₹26,500 and ₹26,350.
In such a scenario, traders can go short at ₹26,600 with a tight stop-loss at ₹26,750 for the target of ₹26,350.
On the other hand, long positions can be initiated at ₹27,200 if the contract moves past ₹27,100. Stop-loss can be placed at ₹26,950 for the target of ₹27,500.
On the global front, the spot gold ($1,188 per ounce) price is range-bound between $1,170 and $1,210. It is currently poised at the mid-point of this range and there is an equal chance of moving in either direction from hereon.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)