In light of the recent fluctuations observed in global bullion markets, gold futures on the MCX have successfully maintained their position above critical support levels, indicating a gradual resurgence of buyers at more attractive price points. The ongoing consolidation phase may set the stage for a potential upward movement, contingent upon prices maintaining levels above the immediate resistance zones. The June gold futures increased by Rs 800 or 0.5% per 10 grams, reaching a peak of Rs 1,59,356 on Monday, even as global prices for the yellow metal declined. Aiding their position was a depreciated rupee, which reached new record lows of 96.18 against the dollar.
The price of gold on COMEX was approximately $4,551.10, reflecting a decrease of $10.80 or 0.24%. Jateen Trivedi noted that MCX gold June Futures are exhibiting signs of base formation in the Rs 1,58,000 – Rs 1,58,500 range following recent corrective pressure, and from a technical perspective, prices are demonstrating early recovery signals from lower levels. The market has experienced continuous selling in recent sessions, driven by a stronger dollar and profit-taking in global bullion prices. Gradual buying interest is manifesting near critical support levels, as geopolitical uncertainty and inflation concerns persist in bolstering safe-haven demand,” he stated.
At their core, markets persist in aligning with US inflation expectations, insights from the Federal Reserve, and global geopolitical events. Uncertainty regarding trade relations, tensions in the Middle East, and anticipations of future US rate cuts persist in offering foundational support to Gold. Simultaneously, the volatility of the rupee is a significant consideration for MCX gold, as a depreciation in the domestic currency may mitigate downside risks, even amidst fluctuations in Comex prices. From a price action perspective, gold is maintaining its position above immediate support around Rs 1,58,000, with intraday recovery attempts observable near the lower band structure.
The current chart setup suggests that should prices remain above the Rs 1,58,500 threshold, short covering momentum may propel Gold towards Rs 1,60,500 initially, with a subsequent target of Rs 1,62,000 in the near term, as noted by Trivedi. On the downside, robust support is established in the range of Rs 1,56,500 to Rs 1,56,000, marking a critical positional support zone for bulls. Analyst noted that any sustained close beneath Rs 1,56,000 could undermine the prevailing structure; however, until that threshold is breached, the overarching framework favors a buy-on-dips approach.