remains below Rs 126,500.
2) RSI
Yellow metal prices fell sharply on Friday after reports that the Fed was unlikely to change its current policy rate.According to CME Group’s FedWatch tool, traders now see a 49% chance of a quarter-point rate cut in December, up from 64% earlier this week.
Lower interest rates are positive for non-yielding gold.
Moreover, the end of the US shutdown also took some of the shine off the yellow metal. Also read: Gold plunges Rs 5,000/10 gram, silver tanks Rs 8,700/kg. Three reasons for yellow metal’s sharpest intraday decline Commenting on current trends, Jateen Trivedi, vice president and research analyst at LKP Securities, said gold prices are adjusting to improving global sentiment following positive cues in US-China trade talks. Moreover, signaling that there is no immediate need for further interest rate cuts, the US Federal Reserve has strengthened the US dollar, weighing on international gold prices, he said.On domestic cues, Trivedi said the weakness of the rupee against the US dollar due to uncertainty over trade rates and foreign outflows is preventing a deeper correction in the MCX, keeping the domestic downtrend relatively cushioned.
According to him, rupee volatility will remain a key factor for domestic bullion prices this week.
The commodity analyst describes technical trends that are likely to influence gold price movement this week and suggests a strategy for traders:
1) Major support and resistance
Gold has fallen sharply after failing to settle above the resistance zone of Rs 127,900 – Rs 128,200 and has now broken below the short-term arrow of ₹ 124,150. The recent bearish candle shows strong selling pressure and confirms a lower-high structure.
— Immediate resistance: Rs 1,25,000 → Rs 1,26,500
— Support levels: Rs 1,23,000 (Small) → Rs 1,22,500 – Rs 1,21,220 (Large S1 zone)
Price action indicates that any pullback towards Rs 125,000 is likely to attract selling interest as long as the price remains below Rs 126,500.
2) RSI
The RSI has fallen to 38-40, indicating renewed bearish momentum. The indicator breaking below the 50 line confirms a trend shift from consolidation to short-term weakness. No signs of oversold reversal are visible yet.
3) Bollinger Bands: Domestic gold prices continued to fall on Monday ahead of a slew of US economic data due later this week. While the chances of a rate cut in December remain bleak, the data, including nonfarm payroll data, could be a key trigger on which direction the Federal Reserve might lean.
The December gold futures on the MCX were trading around Rs 1,23,043, down by Rs 518 or 0.42% from Friday’s closing price. In international markets, the story was identical, with COMEX gold down over $17 or 0.4% to hover around $4,076.60 per troy ounce at 1:10 PM Indian time.
Yellow metal prices fell sharply on Friday after reports that the Fed was unlikely to change its current policy rate.
According to CME Group’s FedWatch tool, traders now see a 49% chance of a quarter-point rate cut in December, up from 64% earlier this week.
Lower interest rates are positive for non-yielding gold.
Moreover, the end of the US shutdown also took some of the shine off the yellow metal.
Also read: Gold costs Rs 5,000/10 gram, silver tanks Rs 8,700/kg. Three reasons for yellow metal’s sharpest intraday decline
Commenting on current trends, Jateen Trivedi, vice president and research analyst at LKP Securities, said gold prices are adjusting to improving global sentiment following positive cues in US-China trade talks. Moreover, signaling that there is no immediate need for further interest rate cuts, the US Federal Reserve has strengthened the US dollar, weighing on international gold prices, he said.
On domestic cues, Trivedi said the weakness of the rupee against the US dollar due to uncertainty over trade rates and foreign outflows is preventing a deeper correction in the MCX, keeping the domestic downtrend relatively cushioned.
According to him, rupee volatility will remain a key factor for domestic bullion prices this week.
The commodity analyst describes technical trends that are likely to influence gold price movement this week and suggests a strategy for traders:
1) Major support and resistance
Gold has fallen sharply after failing to settle above the resistance zone of Rs 127,900 – Rs 128,200 and has now broken below the short-term arrow of ₹ 124,150. The recent bearish candle shows strong selling pressure and confirms a lower-high structure.
— Immediate resistance: Rs 1,25,000 → Rs 1,26,500
— Support levels: Rs 1,23,000 (Small) → Rs 1,22,500 – Rs 1,21,220 (Large S1 zone)
Price action indicates that any pullback towards Rs 125,000 is likely to attract selling interest as long as the price remains below Rs 126,500.
2) RSI (14)
The RSI has fallen to 38-40, indicating renewed bearish momentum. The indicator breaking below the 50 line confirms a trend shift from consolidation to short-term weakness. No signs of oversold reversal are visible yet.
3) Bollinger bands:
Gold has moved to the lower Bollinger band, reflecting a downward increase in volatility. Sustained pressure along the lower band often indicates continued selling. The middle band near Rs 125,200 is now acting as strong resistance.
4) moving averages
The price has broken decisively below both the EMA 8 and the EMA 21, with EMA 8 now attempting a bearish crossover below the EMA 21. This structure indicates that the short-term trend is bearish and a pullback towards moving averages is a selling opportunity.
5) MACD
MACD shows a downward trend below the signal line, with the red histogram bars increasing in size. This confirms the increasing bearish momentum and supports the sell-on-rise strategy.
Gold trading strategy
He recommends a sell-on-rise strategy.
Gold remains under bearish pressure in the near term, and any bounce toward resistance will likely be sold off.
Sell close to Rs 1,25,000 with a stop loss above Rs 126,500 on closing basis and targets of Rs 1,23,000 and Rs 1,22,500. The bias remains bearish as long as gold trades below Rs 126,500.
(Disclaimer: The recommendations, suggestions, views and opinions expressed by the experts are their own. These do not represent the views of The Economic Times.)
Gold has moved to the lower Bollinger band, reflecting a downward increase in volatility. Sustained pressure along the lower band often indicates continued selling. The middle band near Rs 125,200 is now acting as strong resistance.
4) moving averages
The price has broken decisively below both the EMA 8 and the EMA 21, with EMA 8 now attempting a bearish crossover below the EMA 21. This structure indicates that the short-term trend is bearish and a pullback towards moving averages is a selling opportunity.
5) MACD
MACD shows a downward trend below the signal line, with the red histogram bars increasing in size. This confirms the increase and the experts’ opinions are their own. These do not represent the views of The Economic Times.)
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