Despite recent volatility in global bullion markets, gold futures on the MCX have managed to hold above key support levels, signalling that buyers are gradually returning at lower levels. The current consolidation phase could pave the way for a fresh upside move if prices sustain above immediate resistance zones.
The June gold futures rose by Rs 800 or 0.5% per 10 grams to hit the day's high of Rs 1,59,356 on Monday despite global yellow metal prices moving south. They were helped by a weak rupee which fell to fresh record lows of 96.18 against the dollar.
The price of gold on COMEX stood around $4,551.10, down by $10.80 or 0.24%.
Jateen Trivedi, Vice President, Research Analyst at LKP Securities, said MCX gold June Futures are witnessing signs of base formation near the Rs 1,58,000 – Rs 1,58,500 zone after recent corrective pressure, and technically, prices are showing early recovery indications from lower levels. "The market has seen sustained selling during the previous sessions due to stronger dollar movement and profit booking in global bullion prices. Buying interest is gradually emerging near key support levels as geopolitical uncertainty and inflation concerns continue to support safe-haven demand," he said.
Fundamentally, markets continue to track US inflation expectations, Federal Reserve commentary, and geopolitical developments globally. Uncertainty surrounding trade relations, Middle East tensions, and expectations around future US rate cuts continue to provide underlying support to Gold.
Meanwhile, rupee volatility also remains an important factor for MCX gold, as weakness in domestic currency can cushion downside even when Comex prices remain volatile.
From a price action perspective, gold is holding above immediate support near Rs 1,58,000 while intraday recovery attempts are visible near the lower band structure. The current chart setup indicates that if prices sustain above the Rs 1,58,500 zone, short covering momentum can push Gold towards Rs 1,60,500 initially, followed by Rs 1,62,000 in the near term, Trivedi said.
On the downside, strong support is placed near Rs 1,56,500 – Rs 1,56,000, which becomes an important positional support area for bulls, the LKP analyst said, adding any sustained close below Rs 1,56,000 may weaken the structure again, but till then the broader setup favours a buy-on-dips strategy.
Tech view
Technically, EMA 8 is attempting to stabilise near current market levels while prices are also trying to regain strength above short-term moving averages. EMA 21 remains slightly above the current trading zone and can act as immediate resistance initially, but a breakout above it may trigger momentum buying. Bollinger Bands indicate contraction after recent volatility, suggesting that a fresh directional move may emerge during the week. Price currently trades near the lower-middle Bollinger structure, often considered a recovery zone during consolidation phases.
The MACD histogram is showing signs of recovery from deeply negative territory, while the signal lines are attempting a bullish crossover formation on lower time frame charts. This reflects that downside momentum is slowing, and fresh buying participation may emerge if broader sentiment improves. On Balance Volume indicator is also showing stabilization after recent decline, indicating selling pressure is gradually cooling off.
Gold trading strategy
Buy MCX Gold June Futures near Rs 1,58,600 – Rs 1,58,800 with stop loss below Rs 1,56,000 on closing basis for upside targets of Rs 1,60,500 and Rs 1,62,000.
(Disclaimer: The recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times.)
