MCX Gold August futures have staged a sharp intraday recovery, favouring a buy-on-dips strategy, according to Jateen Trivedi, VP Research Analyst - Commodity and Currency at LKP Securities. The rebound from lower support levels suggests the recent corrective phase may be ending, with improving momentum indicators and a positive crossover in short-term price action.
Technical Analysis Overview
The 8-period Exponential Moving Average (EMA) has started turning higher and is attempting to cross above the 21-period EMA, reflecting improving short-term momentum, as per the same analyst. Prices have reclaimed immediate moving average resistance after bouncing from intraday lows, indicating gradually strengthening buying pressure. The Bollinger Band structure also signals a potential reversal: gold tested the lower band before rebounding sharply toward the middle band, suggesting exhaustion in selling pressure and emergence of value buying.
Momentum indicators continue to show improvement. The MACD has generated a fresh bullish crossover with the histogram turning positive after prolonged weakness, indicating that downside momentum is fading and buying strength is returning. The Relative Strength Index (RSI) has recovered from lower levels and is moving higher without entering overbought territory, leaving room for further upside if buying momentum continues.
Intraday Trading Strategy
The buy-on-dips strategy is supported by pivot point analysis, with prices attempting to regain the pivot zone after defending key support levels. Sustained trading above the pivot could trigger short covering and extend toward higher resistance levels.
| Parameter | Level (Rs) |
|---|---|
| Entry Zone | 1,40,750 – 1,40,800 |
| Stop-Loss | Below 1,40,000 |
| Target | 1,42,000 |
Traders may consider buying in the Rs 1,40,750–Rs 1,40,800 zone with a protective stop-loss below Rs 1,40,000 for an upside move towards Rs 1,42,000, as per Trivedi.
Price Outlook
Volatility remains elevated due to uncertainty surrounding global trade policies, geopolitical developments, and expectations over the US Federal Reserve's monetary policy. However, the overall technical setup favours accumulating long positions on declines rather than chasing prices at higher levels, according to LKP Securities.
As long as prices hold above the Rs 1,40,000 support area, the recovery is likely to remain intact, with intermittent profit booking seen as buying opportunities rather than a trend reversal. The target of Rs 1,42,000 is expected to be reached if gold sustains above Rs 1,40,000.
(Disclaimer: Recommendations and views on the stock market or any other asset classes given by experts and analysts are their own. These opinions do not represent the views of The Times of India.)
Sources:
