Gold prices in India are currently displaying signs of weakness, prompting market experts to advise caution and a specific trading strategy for investors. According to Jateen Trivedi, Vice President and Research Analyst for Commodity and Currency at LKP Securities, the precious metal's momentum is tilting in favor of sellers on the domestic exchanges.
Technical Setup Points to Bearish Bias
On the Multi Commodity Exchange (MCX), gold futures were trading near the ₹1,30,000 mark, struggling to sustain above a crucial immediate resistance zone. The price action indicates a loss of bullish conviction, with short-term moving averages flattening and key oscillators failing to show strength. This technical configuration has led analysts to reinforce a sell-on-rise approach for intraday traders.
The detailed analysis reveals that the 8-period Exponential Moving Average (EMA) has flattened and is trending close to the 21-period EMA. This convergence signals indecision and a clear loss of upward momentum in the near term. Jateen Trivedi notes that a failure to reclaim the price zone between ₹1,30,750 and ₹1,31,000 will likely maintain a negative bias for the trading session.
Key Levels and Indicator Signals
Further confirming the mild bearish shift, gold prices have slipped below the mid-line of the Bollinger Bands. The lower band, situated near ₹1,29,200, is now viewed as the next significant support level if the ongoing selling pressure intensifies. The market has repeatedly faced rejection near upper pivot points, suggesting the formation of a short-term top and strengthening the case for a potential downward move.
Momentum indicators align with this cautious outlook. The Relative Strength Index (RSI) is currently at 50.3, reflecting a neutral stance but with a notable absence of bullish strength. This implies limited upside potential and room for corrective pressure. Meanwhile, the Moving Average Convergence Divergence (MACD) remains positioned below its signal line, indicating continued bearish sentiment. The histogram associated with the MACD shows only weak buying pressure, suggesting that any price bounce is likely to be short-lived.
Intraday Trading Strategy for Gold
Based on this assessment, LKP Securities has outlined a clear intraday strategy for market participants. The recommended action is to sell on any price rise.
The firm suggests looking for an entry opportunity in the zone of ₹1,30,400 to ₹1,30,450. To manage risk, a strict stop-loss should be placed at ₹1,31,500. On the downside, the initial target is set at ₹1,29,300, with a further potential target at ₹1,29,000.
The overall bias is considered bearish as long as prices remain below ₹1,30,750. A sustained trade below ₹1,29,800 could accelerate the downside momentum, potentially opening the door for a move toward ₹1,28,800.
Conclusion: Weak Structure Favors Sellers
In summary, the intraday structure for gold on MCX remains weak, characterized by flattening moving averages, a neutral RSI, and a bearish MACD crossover. The repeated inability to break through upper resistance levels reinforces a short-term bearish outlook. Traders are advised to adopt the prescribed sell-on-rise strategy with disciplined risk management, using the specified entry, stop-loss, and target levels. Market participants should monitor the identified support and resistance levels closely for any shift in the prevailing trend.
