Commodity Radar: Fed Rate reduction to stimulate the attraction of Gold. Buy Dips, says LKP Securities Expert

The domestic gold prices reached a new height of RS 1.08.060 per 10 grams on Monday after the end of the last week with more than 4% profits.

The day started with investors who made a profit when opening the trade, but they were again buying in the afternoon trade that lower inhibitions prior to the monetary policy result of the US Federal Reserve that will be released on 17 September. It is expected that every rate reduction will further stimulate the non-building of Gold.

The Golden Futures of October were traded on RS 1.07.957, with RS 229 or 0.21%. The prices at Comex were just before $ 3,652.30 per Troy Oune, with $ 1 or 0.03%.

The outperformance of gold on the domestic markets is also attributed to the weakness of rupee against the dollar.

“The Indian rupid remains under pressure in the midst of trade rate, and this weakness can continue to support MCX Gold despite worldwide corrections. The performance of rupee will remain the key in determining the relative strength of MCX Gold versus Comex,” said Jateen Trivedi, vice -president -community research.

“Gold saw a span of the late week when the American non-farming letter data was lower than expected, while unemployment was checked higher. This recovered expectations of a potential FED rate reduction in September, which supports the safe port-starting power of gold. Trends: trends:

1) Key support and resistance

Golden AugustusFutures have returned strongly from the support zone near RS 97,400 after a long -term correction. The current Momentum has taken the price above RS 98,500 with immediate resistance that is now visible on RS 99,850 – RS 100,300. On the other hand, RS 98,200-RS 97,400 remains a support band in the short term, while a persistent movement above RS 100,300 can lead to a wider outbreak to RS 1.01,000. The structure now tilts Bullish, on condition that £ 98,000 is not enclosed.

2) RSI (14) – 54.70: Positive Momentum Build

The relative strength index has been back to 54.70, rises from almost sold -over territory. This indicates the recovery of bullish momentum, although a break above 60 will further validate the continuation of higher goals. The RSI currently reflects a mild bullish bias.

3) Bollinger -Tanden – reversal of the lower tire

The price is reversed after he has touched the lower Bollinger band briefly and is now approaching the middle tire area. The slope of the tire started with the flattening after a contracting phase, which suggests a likely extension of volatility. A nearby above the middle tire (~ £ 99,300) can release the road for a test of the upper band near £ 100,300 – £ 101,000.

4) EMA 8 & EMA 21 – Try Bullish Crossover

EMA 8 (Red): RS 98,700
EMA 21 (yellow): RS 98,600

The prize has succeeded in regaining both exponential advancing averages in the short term, indicating a shift in the short term trend. A potential bullish crossover between EMA 8 and EMA 21 in the upcoming sessions can contribute to the buying order. These EMAs will now act as support for dip-purchasing zones.

5) MACD – Early Bullish Divergence Form

MacD remains on negative territory, but shows signs of flattening and a possible crossover. The histogram shrinks and suggests a reduction in the downward momentum. A confirmation above the signal line will strengthen the bullish bias.

Gold Trade Strategy

Buy on Dips near RS 99,400 with a stop -loss RS 98,000 locked.

Gold has recovered Momentum after softer American data and increasing expectations of a rate reduction in the next FED meeting. Traders can accumulate on DIPs to RS 99,400 with goals of RS 1.00,300 and RS 1.01,000. Failure to hold RS 98,000 locking would be canceled out the bullish setup and put RS 97,400 – RS 96,200 in focus.

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