India: MCX gold price stuck in a range
Mumbai-India (Dec 14) The gold futures contract traded on the Multi Commodity Exchange (MCX) has been stuck inside a narrow range after its sharp rally in the first week of this month. The contract is range-bound between ₹25,270 and ₹25,750 per 10 gm for more than a week now. It is currently trading near the lower end of the range at ₹25,470. The outcome of the US Federal Reserve meeting is due on Wednesday. There is a strong likelihood of the contract continuing to move within this range until the Fed meet outcome is known.
Traders can stay out of the market through this week. Wait for the contract to break the ₹25,270-25,750 range, to get a clear indication on the next move.
A strong break above ₹25,750 will be bullish. It can take the contract higher to ₹26,000 and ₹26,200 thereafter. On the other hand, a fall below the 21-day moving average support at ₹25,240 can increase the downside pressure and drag the contract lower to ₹24,900 and ₹24,750.
On the global front, the spot gold price ($1,068/ounce) is stuck in between $1,060 and $1,080. A break above $1,080 will ease the downside pressure and take the spot price higher to $1,100. But a break below $1,060 will see the gold price revisiting its crucial support level of $1,050 in the coming week.