Commodity Radar: Buy Dips while gold consolidates for Fed. 5 technical tools to sharpen your transactions

Gold acted on Monday with mild weakness in the midst of profit booking prior to the monetary policy meeting of the American Federal Reserve this week, whose results are expected on Wednesday.

The Golden Futures of October acted on RS 1.09,180 on the MCX around 6.40 pm, a decrease with RS 190 or 0.17%. The prices on the Comex were at $ 3,685.60 per troy ounce, although with a slight negative bias.

Gold received support as a marker prize in a possible reduction of 50 BPS-fed after weaker jobs and wage data, while trade rate uncertainty underlies the Safe-Haven question, said Jateen Trivedi, vice-president, research analyst at LKP Securities, who comment on current trends. He sees the current prizes stretched, which increases the possibility of consolidation.

Among the domestic factors, Indian rupees remains a key. The persistent weakness at the dollar has supported the prices for the precious metal.

1) Key support and resistance

Gold October Futures traded but was confronted with resistance near RS 1.09.700-1.09.900. On the other hand, the most important support is on RS 1.08.850 followed by RS 1,08,300. A decisive movement above RS 1.09.900 can extend the profit to RS 1.10,400, while a slip under RS ​​1.08,850 can invite the sales pressure in the short term.

2) RSI

RSI (14) is at 50.77, which indicates consolidation after an overbough phase. This neutral zone suggests that the market cools and the strength will only be attached if RSI trends higher above 60.

3) Bollinger -Bands

The prizes come closer to the center of the tire after testing the upper tire. The narrowing tires point to consolidation in the short term, although expansion can restore volatility.

4) Travel averages

EMA-8 and EMA-21 are flat line with price that floates around them, which confirms a consolidation phase. Persistent trade above EMA-8 (RS 1.09,300) will remain intact in the short term Bullish Momentum.

5) MacD

MacD is still in a positive area but is flattened, with the histogram narrowing. This suggests loss of Momentum, hints sideways to corrective price action before the next directional movement.

Gold Trade Strategy

Gold has been introduced a consolidation zone after a sharp rally, but the basic principles remain supportive. A buy on dips strategy is advisable for the week. Buy 1.08.850 for goals of RS 1.09.900/1.10.400 and a stop loss of RS 1.07,450.

((Indemnification: Recommendations, suggestions, views and opinions of the experts are their own. These do not represent the views of economic times)