Gold prices closed at ₹96,500 in the previous session but are projected to open between ₹96,100 and ₹96,200—a gap down of approximately 300 to 400 points. This anticipated decline reflects a soft performance in overnight COMEX trading, driven by a stronger U.S. dollar and rising U.S. Treasury yields, which have eroded gold’s appeal as a traditional safe-haven asset.
The broader market remains cautious, with gold trading below recent record highs and investors adopting a wait-and-see approach. Key technical indicators suggest heightened selling pressure in the short term.
Technical Analysis
According to technical charts, immediate resistance is seen at ₹96,350, while support lies at ₹96,100. The Relative Strength Index (RSI) is expected to open below 40, indicating an oversold condition that could prompt a short-term rebound. However, a bearish crossover on the Moving Average Convergence Divergence (MACD) indicator, along with a negative histogram, confirms sustained bearish momentum.
Trading Strategy
Analysts recommend a “sell-on-rise” strategy, particularly within the ₹96,350–₹96,400 range. This zone aligns with several resistance factors, including the 8-day exponential moving average (EMA) at ₹96,350, which may act as dynamic resistance. Additionally, former support levels have now turned into resistance, further complicating recovery efforts.
Traders are advised to initiate short positions near ₹96,375, setting a stop-loss at ₹96,550—just above the previous session’s high. Profit targets for this strategy include ₹96,000 as the first level, followed by ₹95,800, with an extended target of ₹95,550 for swing positions.
Market participants should allow time for the market to stabilize following the anticipated gap down and closely monitor price action near resistance levels before executing trades.
Sentiment and Risk Factors
The prevailing market sentiment is bearish, shaped by macroeconomic conditions including a firm U.S. dollar and rising 10-year Treasury yields. These trends have weakened gold’s status as a defensive asset, especially as equity markets show signs of strength.
However, traders should remain alert to potential catalysts that could alter the outlook. Geopolitical tensions may spur renewed safe-haven demand, while any unexpected decline in the dollar could support a rebound in gold prices. Moreover, upcoming U.S. economic data releases and any sharp movement in international gold markets could significantly influence sentiment.
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