Short-term view bullish for India's gold price
Mumbai-India (Aug 17) After hovering above ₹24,500 per 10 gram and forming a base for more that two weeks, the MCX gold futures contract has surged over 3 per cent in the past week.
A strong surge above $1,100/ounce in the global spot gold price coupled with the rupee weakening below 65 a dollar in the past week has pushed the MCX-gold futures contract higher.
The contract is currently trading at ₹25,945. The immediate outlook for the contract is bullish with support in the ₹25,500-₹25,350 zone. A rise to ₹26,500 looks likely in the coming week.
Traders with a short-term perspective can go long. Stop-loss can be kept at ₹25,400 for the target of ₹26,500. Intermediate dips to ₹25,500 can be used to accumulate long positions.
The contract will come under pressure if it breaks below ₹25,350. Such a break can drag it to ₹25,000 and ₹24,450.
On the global front, the spot gold price ($1,118/oz) has breached the psychological $1,100 resistance decisively in the past week, thanks to China devaluing its currency.
Strong support in the $1,110-1,100 zone is likely to limit the downside for the price of gold. A rise to $1,135 looks likely in the coming days. This coupled with weak rupee could aid a rally in the domestic futures contract as well.