India gold price rebounds from key support level
Mumbai-India (Aug 31) The gold futures contract traded on the Multi Commodity Exchange (MCX) has reversed higher after recording a low at ₹26,169 per 10 gm on Thursday.
Prior to this bounce, the contract had dropped sharply from the high of ₹27,833 recorded on August 24. The contract is currently trading at ₹26,640.
The reversal from last week’s low has happened at the 50 per cent Fibonacci retracement support at ₹26,142. This suggests that the recent down move is just a corrective fall of the uptrend that has been in place since August.
Key support to watch is at ₹26,000. There is no danger of any further fall as long as the contract trades above this level. Immediate resistance is at ₹27,000. The contract could gain momentum on a breach of this hurdle. Such a break can take it higher again to ₹27,500 and even ₹28,000.
Short-term traders can go long. Stop-loss can be kept at ₹25,850 for the target of ₹27,500. Intermediate dips to ₹26,350 or ₹26,000 levels can be used to accumulate long positions.
On the global front, the spot gold price ($1,128/ounce) has bounced last week from the 21-day moving average support, currently at $1,119. A rise to $1,140 and $1,150 is possible in this week.
However, the bullish outlook will get negated if the price declines below $1,119. In such a scenario, gold price can fall to $1,110 and then to $1,105.
If this fall happens, then the bullish outlook on the MCX-gold mentioned above would also get negated and there could be chances of the contract falling below ₹26,000.