Outlook bullish for India-MCX gold
Mumbai-India (Feb 16) Gold futures traded on the Multi Commodities Exchange (MCX) was volatile and dropped ₹111 or 0.4 per cent from the previous week. It took support around ₹26,500 per 10 gm and is hovering slightly above this base level. This level is a significant support which provided cushion in late December 2014 and early January 2015. The commodity subsequently rallied to hit the roof at ₹28,500 in early February. The near-term outlook will remain bullish as long as the yellow metal trades above the significant medium-term support level of ₹26,500. Therefore, traders with high risk appetite can initiate long position with a stop-loss at ₹26,500. A strong rally above the immediate resistance level of ₹27,000 can push the commodity higher to ₹27,500 in the short-term. Next key resistances are placed at ₹28,000 and ₹28,500.
On the other hand, an emphatic tumble below the key support level of ₹26,500 can experience selling pressure and pull the commodity down to ₹26,000 or further down to ₹25,500. In that case, traders should exit their long position and remain cautious.
Global spot gold was choppy testing the important support at $1,220 per ounce in the week ago. It now trades above the base level, at around $1,233. The short-term uptrend that commenced from the November 2014 low of $1,131 will stay in place as long as the commodity trades above $1,200 levels. Continuation of the uptrend can encounter resistance at $1,250. A decisive breakthrough of $1,250 is required to strengthen the uptrend and take the price higher to $1,280 and $1,300 in the coming weeks.