Commodity Radar: For every 20 to 30 paise rupees fall, domestic gold gains Rs 100-150/10g. LKP analyst advises buying on dips

Domestic gold yields fell today, reflecting international prices, as uncertainty over US Federal Reserve rate cuts in December looms in a divided house. Last month’s meeting of policymakers saw unusual divisions within the U.S. central bank, with some members favoring looser policy while others pushed for tougher conditions.Fed Chairman Jerome Powell described them as “widely divergent positions” during his press conference after the 10-2 vote to cut rates by 25 basis points, putting them in a range of 3.75% to 4.00%.

December gold futures fell 0.7% or Rs 833 at around 5:30 pm and hovered around Rs 1,23,358 per 10 gram. Gold prices on COMEX were down 0.34% or $14 per troy ounce today, trading at $4,065.50 at this time.Commenting on current trends, Jateen Trivedi, vice president and research analyst at LKP Securities, said the US-China trade tariff negotiations showed constructive signals, which briefly limited the uptrend but did not result in major selling.

Crucial US economic data will be released this week, including key retail sales figures, GDP estimates and weekly jobless claims, all of which could shape expectations for Fed policy in December, Trivedi said.

The Fed’s neutral to hawkish stance last week kept the COMEX gold range range-bound, but not bearish.5 triggers to make a trade:1) Major support and resistance

Gold is consolidating within a tight range after a correction phase from the peak of Rs 129,000. The price has now regained the short-term average and is stabilizing around the Rs 123,000 zone.

The immediate support is Rs 1,23,000 – Rs 1,22,800 while the major support is Rs 1,21,800. Immediate resistance is seen at Rs 1,24,200 while the major resistance is between Rs 1,25,000 and Rs 1,26,400. A close above Rs 1,25,000 will revive momentum towards Rs 1,26,400. Sustained trading below Rs 1,21,800 could create downward pressure.

2) RSI (14)

The RSI at 55.79 shows mid-range momentum. It indicates that there is no overbought situation and there is a gradual bullish recovery from previous weakness. It supports a buy-on-dips approach.

3) Bollinger band

The price rises from the middle band and tries to test the upper band. The bottom band is still untested, indicating bottom protection. A break above the upper band near Rs 1,25,000 could unlock a new bullish leg.

4) moving averages

EMA-8 (Red): Uptrend and acts as immediate dynamic support.

EMA-21 (Yellow): Flattening, but price remains above.

This crossover structure continues to support short-term bullish sentiment and favors buying on dips.

5) MACD

MACD is still in the recovery zone with a decreasing negative histogram. This indicates that bearish momentum has faded and there are early signs of a bullish crossover build. Expect a stronger boost once the MACD moves firmly above the signal.

Meanwhile, the Indian rupee, which is hovering near its all-time low, one of the domestic triggers, continues to provide strong support to the MCX gold price.

“The INR remains weak due to trade uncertainty and pressure on the domestic currency. Any decline of Rs 0.20 – Rs 0.30 rupee could add Rs 100 – Rs 150 to MCX gold. This structural weakness of the rupee will keep the MCX gold price high against COMEX.

Gold trading strategy

Trivedi recommends ‘Buy on Dips’ of Rs 1,22,800 – Rs 1,23,300 for targets of Rs 1,24,200 – Rs 1,25,000. He estimates the stop loss at Rs 1,21,800 on a closing basis.

The technical structure remains stable, with momentum indicators turning positive and with strong currency support and improving global cues, buy drops are recommended. A breakout above Rs 1,25,000 could open Rs 1,26,400 – Rs 1,27,300 in the coming weeks.

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