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The gold futures contract traded on the Multi Commodity Exchange is facing resistance near ₹25,500 per 10 gm. The contract recorded a high of ₹25,491 on Friday and reversed thereafter. It is currently trading at ₹25,170. Immediate support is at ₹25,000. If this support holds, the contract can continue to remain range-bound between ₹25,000 and ₹25,500. A breakout on either side of ₹25,000 and ₹25,500 will decide the next leg of move for the contract.
A break below ₹25,000 will increase the downside pressure. In such a scenario, the contract can fall to ₹24,500 — the next important support level.
Further break below ₹24,500 can take the contract lower to ₹24,000. Short-term traders with high risk appetite can go short if the contract breaks below ₹25,000 with a tight stop-loss at ₹25,200 for the target of ₹24,550.
On the other hand, if the contract sustains above ₹25,000 and manages to surpass the hurdle at ₹25,500, the short-term outlook will turn bullish. Such a break can take the contract to the next targets of ₹25,750 and ₹26,000 .
On the global front, spot gold price ($1,070 per ounce) is hovering above an important support at $1,065. A strong break below this support can take the spot price lower to $1,050.
However, if the yellow metal manages to sustain above $1,065, then a rally to $1,080 and $1,090 is possible in the coming week.
Note: The recommendations are based on technical analysis. There is a risk of loss in trading.
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