Gold prices are showing signs of consolidation after recent volatility, as traders assess technical signals and broader market dynamics. Analysts at LKP Securities have outlined key factors influencing the precious metal’s trajectory and suggest strategic approaches for investors amid an uncertain trading environment.
Market Snapshot
June 2025 gold futures are currently consolidating after testing higher levels earlier this month. At present, gold is priced at ₹96,307, reflecting investor indecision around critical resistance and support thresholds. Technical indicators are revealing a tug-of-war between bullish and bearish sentiment.
Notably, a bearish engulfing pattern has formed on the 15-minute chart, pointing to possible short-term selling pressure. The metal has also pulled back from the upper Bollinger Band and is stabilizing near the middle band, indicating waning volatility.
Price action is currently above the 8-period exponential moving average (EMA) of ₹96,200 but remains below the 21-period EMA at ₹96,500—suggesting a neutral to slightly bearish undertone. The Relative Strength Index (RSI) stands at 44.14, indicating neither overbought nor oversold conditions, though momentum appears to be weakening. Meanwhile, the Moving Average Convergence Divergence (MACD) is trading below its signal line, a sign of increasing bearish momentum.
Trading Strategies: Bullish and Bearish Setups
LKP Securities advises traders to consider two primary scenarios based on price movements around key technical levels:
Bullish Setup: A move above ₹96,500 could signal the start of an upward trend. Traders may consider initiating long positions with a first target at ₹96,850 and a second target at ₹97,100, which aligns with historical pivot resistance levels. A stop-loss order around ₹96,000 is recommended. This scenario is supported if the price rises above the 8-period EMA, the RSI crosses 50, and the MACD begins to show positive divergence.
Bearish Setup: If gold breaks below ₹96,100, it could indicate renewed selling pressure. In this case, traders might look to short the metal, targeting ₹95,900 initially and ₹95,700 subsequently—near the previous session’s support levels. A stop-loss at ₹96,300 is suggested to manage risk. This setup would be validated if the price stays below the 21-period EMA, the RSI remains under 50, and the MACD continues its downward movement.
Outlook and Risk Considerations
Short-term projections suggest gold may remain in a consolidation phase with a mild bearish tilt unless it decisively breaches the ₹96,500 resistance. Analysts note that the ₹95,800–₹95,900 zone may act as strong support, potentially attracting value buyers. A sustained move below this level, however, could trigger additional downside momentum.
Investors are encouraged to monitor external drivers, particularly movements in the US dollar, upcoming economic data releases, and geopolitical developments. These factors are likely to influence gold’s direction throughout May.
Key risk variables include central bank commentary, fluctuations in the dollar index, and shifts in global risk sentiment, especially in light of geopolitical instability.
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