The immediate outlook for gold futures is unclear. The contract recorded a high of ₹27,095/10 gram on April 6 and has reversed. However, the fall halted at a low of ₹26,462 on Thursday. The bounce from this low seems to lack momentum which has left the near-term view uncertain. The contract is currently trading near ₹26,700.

Fresh trading positions can be avoided at the moment. However, traders who have taken longs last week around ₹27,000 levels can continue to hold it with the same stop-loss at ₹26,350 for the target of ₹27,850. A trend line support is at ₹26,500. There is no immediate danger of a sharp fall while this support holds. Rupee is trading weak. It can off-set any sharp fall in the global spot gold ($1,198/ounce) price, if seen and help in limiting the downside for the contract. The global spot gold has key support at $1,190. A reversal from here can take the price higher to $1,235. The downside pressure will increase only if gold declines below $1,190 decisively. The next target will be $1,175

On the domestic front, as long as the contract trades above ₹26,500, a rise to ₹27,000 and ₹27,150 looks likely in the coming days. A strong break above ₹27,150 will then open doors for the next target of ₹28,000. The outlook will turn negative if the contract declines below the immediate support at ₹26,500. Such a break can drag it to ₹26,300 – the 21-day moving average level initially and then to ₹26,000 thereafter.

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

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