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The outlook for the gold futures contract traded on the Multi Commodity Exchange (MCX) is bearish. Last week the contract witnessed a sharp bounce from the low of ₹25,562/10 gm. The rupee falling to 63 levels against the dollar on Friday aided this reversal. However, the rebound seems to be losing steam. The contract is currently trading near ₹25,830.
The outlook is bearish with key resistances at ₹25,950 and ₹26,200 – the 21-day moving average level. Intra-week rallies to these levels might attract fresh selling interest coming into the market. Having said this, the MCX-gold futures contract is likely to fall to ₹25,200 and ₹25,000 in the coming days.
Traders with a short-term perspective can go short at current levels. Stop-loss can be kept at ₹26,250 for the target of ₹25,200.
On the global front the spot gold ($1,155/ounce) is stuck in a sideways range of $1,150 and $1,165 since Wednesday. The bias is bearish and the yellow metal is likely to break below its support at $1,150. Such a break can drag the spot gold price lower to $1,135 this week. A fall in the global spot price could limit the upside in the MCX-gold futures contract this week. The outcome of the US Federal Reserve meeting is due this Wednesday. This is a key event that can keep the bullion price volatile.
Note: The recommendations are based on technical analysis. There is a risk of loss in trading.
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