Strong signals from international precious metals markets boosted sentiment on the MCX, with gold opening a gap-up and extending gains during the session. Domestic prices got a double boost from the rupee’s weakness, with the currency falling 0.3% to 91.23 – the lowest level in a month and the weakest since early February.Yellow metal prices on the COMEX were trading around $5,393.30, up $145.40 an ounce or $2.77%.
The war intensified after Iran’s Supreme Leader Ayatollah Ali Khamenei was killed by US-led strikes on Saturday. A ceasefire remains out of sight because Iran has ruled out any possibility of talks with the US.
“Increased geopolitical risk during the US-Israel war has led to sharp flows from safe havens into bullion, lifting MCX gold to the Rs 1.68-Rs 1.69 lakh range and reflecting global risk sentiment,” said Jateen Trivedi, Vice President & Research Analyst at LKP Securities. Safe-haven interest in the yellow metal is driving up the risk premium as commodities remain volatile in the aftermath of the war, Trivedi said.
Traders can expect sharp moves amid the rupee’s volatility. Any weakness in the INR against the US dollar will support the precious metal. Domestic gold prices (MCX) are reacting more sharply than international prices (COMEX) due to persistent INR volatility, which amplifies movements during risk-off scenarios. A weaker rupee continues to cushion the downtrend and support domestic bullion levels, the LKP analyst said.
5 technical indicators to pay attention to:
Important support and resistance
Bullion rose sharply last session, indicating strong near-term demand. The current consolidation above recent highs reflects accumulation rather than distribution.
The immediate support is at Rs 1,66,500, which is also the short-term demand zone based on recent pullbacks, while major support is seen at Rs 1,64,000. The short-term resistance is between Rs 1,69,500 and Rs 1,70,000 with the next hurdle being above Rs 1,71,000.
The trend will remain bullish as long as the support at Rs 1,64,000 holds on a closing basis, Trivedi said.
2) Momentum indicator
The RSI (14) is near 82-83, indicating strong bullish momentum. While this indicates that the price is in an overbought zone, such high RSI levels on strong trends often persist through the continuation phases, rather than signaling an immediate reversal.
3) Bollinger bands
The price is trading near the upper band, indicating strong upside momentum and an increase in volatility. The expansion and directional slope of the bands suggest that any retracement is likely to remain shallow and within the trend context, rather than signaling a trend reversal.
4) moving averages
EMA 8 (red) is sharply upside and acts as dynamic support on dips, while EMA 21 (yellow) provides underlying trend support and is positioned well below current prices. Holding prices above both EMAs confirms the continuation bias and supports the buy-on-dip strategy.
5) MACD
The MACD remains in positive territory with histogram bars above zero, indicating bullish momentum. Although not shown on the chart, the weekly structure suggests that momentum is increasing rather than reversing.
Gold trading strategy
The bullish momentum remains intact and the trend is aligned higher, this analyst said, recommending a buy-on-dips strategy towards the lower support band around Rs 1.66 – Rs 1.67k. These levels should attract fresh buying as long as the support at Rs 1.64 lakh remains unbroken at a weekly close, he opined.
Buy zone: Rs 1,66,500 – Rs 1,67,000
Stop Loss: Less than Rs 1,64,000 on closing basis.
Targets: Rs 1,69,500/Rs 1,71,000+
(Disclaimer: The recommendations, suggestions, views and opinions expressed by the experts are their own. These do not represent the views of The Economic Times.)
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