Commodities Radar: Gold may rise by another Rs 2,400/10 gram this week. Rupee, risk feelings remain triggers: LKP Securities

Domestic gold prices rose by Rs 1,300 per 10 grams or 1% on Monday, reflecting international prices amid risky sentiments in equities and Bitcoin. The sharp rise in MCX gold prices against its foreign peers was due to the weakness of the rupee against the US dollar. February gold futures were trading at Rs 1,30,800 per 10 gram around 2 pm, compared to gold’s gain of 0.5% or $20 per troy ounce on the COMEX at $4,274.70.

Gold strengthened as the dollar index (DXY) fell, falling 0.83% over the past five sessions and currently hovering around 99.36 against a basket of six major currencies. The Indian rupee extended its 0.8% decline in November into the first day of December, falling further to 89.73/$, surpassing the previous record low of 89.49/$ recorded just two weeks earlier.

Gold has gained on the rupee’s weakness and is up more than 60% so far this year.

Commenting on current trends, Jateen Trivedi, vice president and research analyst at LKP Securities, said gold remains fundamentally well supported as US-China tariff developments showed mild positive signs, reducing global risk but still leaving safe haven demand intact.

Gold prices will be guided by developments surrounding the Federal Reserve’s December monetary policy, which begins next week (December 9).

Trivedi said broader markets expect the Fed to remain cautious until data shows clearer disinflation, indirectly supporting gold on dips.

As for the rupee, the ongoing weakness continues to add a bullish premium to MCX gold, he said, adding that any fresh depreciation will add to upside moves even if global gold remains sideways.

Technical triggers to look out for:

1) Major support and resistance

Gold continues its upward momentum and closes near Rs 1,30,299, marking a stable bullish structure over the past two weeks. Price action shows strong buying interest above Rs 1,28,700, with a sequence of higher highs and higher lows.

— Immediate support at Rs 1,29,000, which is a key buying area

— Major support at Rs 1,28,000, and any breakdown will be below this level only

— Immediate resistance is at Rs 1,32,000 while major resistance zone is Rs 1,33,200 – Rs 1,34,200

A sustained move above Rs 1,32,000 opens the way to Rs 1,33,800 – Rs 1,34,200.

2) Technical data

The RSI is trending upwards at 67, reflecting strengthening bullish momentum, but still below the overbought level. The momentum supports the continuation of the current rally, especially if prices remain above the 8 EMA. The price is trading near the upper Bollinger band, indicating upward pressure and continuation of the trend. No signs of a turnaround yet; The expansion in volatility supports further bullish move unless the price closes below the mid-band (Rs 1,28,700).

— EMA 8: Rs 1,29,650

— EMA 21: Rs 1,28,745

The price is trading solidly above both EMAs, confirming a bullish structure in the short and medium term.

Pullbacks toward these averages should attract buyers.

The MACD remains in positive territory with widening histogram bars, indicating strengthening bullish momentum. No bearish divergence is noticeable yet.

Also read: Rupee at low levels despite GDP boost. Is a steeper decline in store?

Gold trading strategy: buying on dips

— Buy zone: Rs 1,29,000

— Stop Loss below Rs 1,28,000 on closing basis):

Objectives:

– Rs 1,32,000/Rs 1,33,000–Rs 1,33,200

Gold remains technically and fundamentally in a stable uptrend, with dips likely to find strong support

purchasing flows during the week.

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