India: Near-term outlook bearish for MCX gold
Mumbai-India (Nov 30) Pressure is mounting on the gold futures contract traded on the Multi Commodity Exchange (MCX). The contract has declined below an important support at ₹25,000 per 10 gm on Monday and is currently trading at ₹24,954. The weak rupee has failed to lend support to the contract due to the sharp fall in the global gold price on Friday.
The outlook for the contract is bearish. A fall to test the next key support at ₹24,500 is likely in the coming days. Traders who have taken short position as per the advice given in this column last week can hold the position. Keep the stop-loss at ₹25,300 for the same target of ₹24,550.
The contract will come under renewed pressure if it declines below ₹24,450. Such a fall will increase the danger of the contract extending its fall to ₹24,000 and ₹23,650.
On the other hand, if the contract manages to reverse higher from ₹24,450, then a corrective rally to ₹25,000 is possible.
On the global front, the spot gold price ($1,055/ounce) hovers above an important support at $1,050. While this support holds, a range-bound movement between $1,050 and $1,065 is possible for some time. The downside pressure will ease only if the spot prices rise past ₹1,065 decisively. On the other hand, the downside pressure will increase if the global gold price falls below $1,050. Next targets will be $1,040 and $1,030.