Gold prices in India are showing early indications of finding a stable footing after a recent corrective phase, presenting a potential buying opportunity for investors, according to market experts. The precious metal, after a period of consolidation, is now hinting at a base formation, setting the stage for a possible upward move.
Expert View and Market Stabilization
Jateen Trivedi, Vice President and Research Analyst for Commodity and Currency at LKP Securities, believes the phase of correction is likely over. He suggests that investors can now look to accumulate the yellow metal on price declines. This outlook comes as gold futures on the Multi Commodity Exchange (MCX) were trading near the ₹1,35,690 per 10 grams mark. The price action, having defended key intraday supports, points towards a market that is tiring of the recent sell-off, with limited downside momentum visible at current levels.
The technical setup, as analyzed by Trivedi, favors a buy-on-dips approach around the ₹1,36,000 level, provided traders employ clearly defined risk management strategies. The market's ability to hold above crucial support zones is strengthening the short-term bullish bias.
Detailed Technical Analysis and Indicators
A closer look at the charts reveals several positive signals. The price is currently hovering close to a cluster of short-term Exponential Moving Averages (EMAs). Notably, the EMA 8 is attempting to turn upwards and cross above the EMA 21, which is a classic sign of improving short-term momentum. A sustained move above ₹1,36,000 could confirm this trend reversal.
Furthermore, gold has successfully defended the lower band of the Bollinger Bands and is now consolidating near the mid-band. This structure typically indicates that the earlier selling pressure is easing. A revival in buying interest above the support zone could pave the way for a move towards the upper Bollinger Band.
The key pivot levels from the previous session outline the immediate battle lines. The major support zone is identified between ₹1,36,000 and ₹1,35,700, while resistances are placed at ₹1,37,000 and ₹1,38,000. Holding above the pivot support is crucial for maintaining a positive intraday outlook.
Momentum indicators also support the stabilizing narrative. The Relative Strength Index (RSI) is near 53, comfortably positioned above the neutral 50 mark. This suggests improving momentum and leaves room for further upside without the asset being in overbought territory. Meanwhile, the Moving Average Convergence Divergence (MACD), which was in a negative phase, is now flattening. Its histogram bars are contracting, signaling that the bearish momentum is fading and a positive crossover could be on the horizon if buying sustains.
Intraday Trading Strategy and Levels to Watch
Based on this technical structure, LKP Securities has outlined a specific trading strategy for the session. The recommended action is to buy on price dips. Traders are advised to look for an entry point near ₹1,36,000. To protect capital, a strict stop-loss should be placed at ₹1,34,700. On the upside, the initial target for the trade is set at ₹1,38,000.
The overall bias remains bullish as long as prices trade above the ₹1,36,000 mark. Weakness would only be expected if the metal breaks and sustains below the ₹1,34,700 support level.
In conclusion, the intraday technical picture for gold points towards a market stabilizing after a corrective move. This view is backed by the alignment of key moving averages, the strength in the RSI, and the fading pressure on the MACD. Traders may consider initiating long positions around the defined support, with a disciplined approach to stop-loss and profit targets.
