Gold prices are currently under downward pressure, with February futures trading around ₹1,37,800. Jateen Trivedi, VP Research Analyst at LKP Securities, notes that the recent rally seems to be losing momentum, suggesting a potential sell-on-rise strategy for traders. Technical indicators point to resistance levels near ₹1,38,000, prompting market participants to approach trading with caution.
Current Market Analysis
Gold prices have recently undergone a noticeable pullback, with February futures on the Multi Commodity Exchange (MCX) hovering around ₹1,37,800. This recovery is viewed as corrective, given the strong resistance in the previous breakdown zone. Technical indicators show that the upward momentum is weakening, making higher price levels vulnerable to renewed selling pressure. The prevailing intraday setup indicates that traders should consider a sell-on-rise strategy within the ₹1,37,800 to ₹1,38,000 range.
Technical Indicators and Resistance Levels
The current trading scenario reveals that gold prices are beneath the short-term exponential moving average (EMA) cluster, with EMA 8 failing to hold above EMA 21. This indicates a fragile short-term structure, suggesting that any rallies are likely to be met with selling rather than sustained upward movement. The price recently moved back toward the mid-Bollinger band after testing lower levels, but the upper band near ₹1,38,000 remains a significant resistance point.
The previous day’s pivot points indicate a resistance zone between ₹1,37,800 and ₹1,38,000, while support levels have been identified at ₹1,36,800 and ₹1,36,400. The inability to sustain above the pivot resistance suggests a bearish bias for the intraday trading session.
Trading Strategy and Recommendations
For traders navigating the current gold market, the recommended strategy is to sell on any rise within the ₹1,37,800 to ₹1,38,000 range. A stop-loss should be set at ₹1,39,100, targeting downside movement aimed at ₹1,36,400. Market sentiment remains bearish below ₹1,38,000, with any strength only being confirmed above ₹1,39,100.
The Relative Strength Index (RSI) currently stands around 60, indicating a short-term recovery but lacking the strength to confirm a trend reversal. Additionally, the Moving Average Convergence Divergence (MACD) has shown a brief positive crossover; however, the flattening histogram bars suggest diminishing bullish momentum, increasing the likelihood of a price rollover from higher levels.
Digihunt is not a financial advisor and this is not investment advice.