Commodity Radar: Gold rates at Rs. 1,300/10 g decreases. 4 Reasons Why This Decline Is a Buying Opportunity

Domestic gold prices fell sharply on Monday, which fell by Rs. 1,300 per 10 grams or about 1%. Traders booked profits following last week’s rally, during which the yellow metal took a breather as it hit a sustained record high. February gold futures on MCX at Rs. was trading at 1,38,555.

Yellow metal futures on Friday closed at Rs. 1,40,465 touched a fresh lifetime high.

International prices also slipped below $4,500 an ounce after touching the milestone last week. They were trading around $4,496.40, down $56.30, or 1.24%, from Friday’s close.

Jatin Trivedi, Vice President – Research Analyst, LKP Securities said that gold continues to trade in structurally bullish territory. While momentum indicators suggest a short-term consolidation is possible, the broader trend favors buying on dips rather than selling on strength, he said.

While the INR has slipped today, it has regained some strength from the lifetime low of 91 per dollar. The rupee fell 5 paise to 89.95 against the US dollar in early trade on Monday, PTI reported.

“The relative strength of the rupee keeps MCX gold slightly weaker compared to COMEX prices. However, this effect remains marginal as global gold sentiment remains strong. Any rupee weakness can quickly translate into a sharp rally in MCX gold.

Tech View

1) Key support and resistance

“Gold remains in a strong uptrend, trading near the upper end of its recent range after a sharp rally. The price is holding comfortably above the breakout zone of Rs 1,31,500-1,32,000 and continues to form higher highs and higher lows on the daily chart. Consolidation near the highs indicates strength, relative to the distribution. Trivedi said. was

Immediate Support Rs. 1,34,500 is seen while the main support is Rs. 1,32,500, he said, while Rs. 1,36,000 placed immediate resistance while the next hurdle was Rs. 1,37,000 is on.

As long as price closing basis is Rs. A broad bullish structure remains intact until it holds above 1,32,500.

2) RSI (14)

RSI is near 73 reflecting strong bullish momentum. While the indicator is in the overbought zone, it has not shown any major bearish divergence so far. This suggests that momentum remains positive, although intermittent consolidation or shallow declines are likely before the next leg is over.

3) Bollinger Bands

Gold is trading near the upper Bollinger Bands, with the bands expanding, which usually signals a continuation of the trend. No significant mean-reversion signal is visible yet, and the price remains well supported above the mid-band, reinforcing the buy-on-dips structure.

4) Moving Average

EMA 8 and EMA 21 – Holding dynamic support

— EMA 8: Rs. Close to 1,34,800

— EMA 21: Near Rs 1,33,400

Both EMAs slope upwards, acting as dynamic support zones. Any pullback towards this average is likely to attract buying interest, keeping the short-term trend positive.

5) MACD

MACD remains in positive territory, with a signal line above zero and the histogram is in the green zone. Momentum indicators continue to support the prevailing uptrend, with no immediate signs of a trend reversal.

Gold Trading Strategy: Buy on Dips

— Buy Zone: Rs 1,34,500

— Stop Loss (Closing Basis): Rs. 1,32,500 below

— Target: Rs. 1,36,000/ Rs. 1,37,000

(Disclaimer: Recommendations, suggestions, opinions and views given by experts are their own. These do not represent the views of Economic Times.)