Commodity Radar: Gold jumps Rs 1,700 on MCX amid Trump's fresh tariff threats. 5 technical signals to watch

Economic Times

3 days ago

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Tech view
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5 technical insights before making a trade:
1) Key levels
2) RSI (14): 57.49 – Bullish tilt with room to expand
3) Bollinger Bands: Expanding, suggesting volatility resumption
4) Moving Averages – EMA 8 & EMA 21 suggest bullish cross confirmed
EMA 8 (Yellow): Rs 96,640
EMA 21 (Red): Rs 96,000
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Fundamentals
Gold strategy: Buy-on-Dips
Gold prices surged 2% or by Rs 1,740 on Monday following Donald Trump administration's threat of doubling steel import levies to 50%. The domestic prices took cues from the international prices which were up by $66 per troy ounce and trading around $3,355.Around 7 pm, the MCX June gold futures were trading at Rs 97,473, up by Rs 1,598 or 1.67% from the last closing price of Rs 95,875.The gold prices were up, gaining from a slip in the dollar index (DXY) which was hovering around 99 against a basket of six top currencies. It was down by 0.43 points or 0.43% at 98.90. It has declined by 0.21% over the past five trading sessions.'Gold reacted positively as market priced in the re-rising geopolitical risk between Russia and Ukraine, following intensified cross-border retaliations,' Jateen Trivedi, VP Research Analyst - Commodity and Currency, LKP Securities said."Gold August futures rebounded strongly from the Rs 96,100 zone and closed the week at Rs 97,196, showing bullish intent. Price is attempting a breakout from the recent consolidation range and now trades well above both short-term and medium-term averages," Trivedi said.The near-term support and last week's low is at 96,000 while a major swing support and psychological base is seen at Rs 94,000. Rs 92,200 is the trend-defining base and a breakdown below this invalidates bearish structure, Trivedi said. He sees immediate resistance at Rs 97,500 which was last week's high while the intermediate resistance lies near the upper bollinger band of Rs 98,400."The bias remains positive as long as Rs 96,000 holds and a close above Rs 97,500 could push prices quickly toward Rs 98,400–Rs 99,300.The RSI has rebounded from the 50-support level and currently rests near 59, suggesting a mild bullish bias. While the oscillator is not in overbought territory, it reflects a recovering trend. A break above Rs 96,700 could fuel further momentum toward overbought zones. On the contrary, a fall below Rs 95,200 may see the RSI dropping back toward neutral levels.The RSI has rebounded from previous lows and now stands at 57.5, pointing toward a rising bullish momentum. It is not yet in overbought territory, indicating that there's still room for upside. A sustained move above 60 will reinforce bullish continuation.The bands are starting to widen, suggesting that volatility may be returning after a contractionphase in mid-May. The price is now hugging the upper band, hinting at buying pressurebuilding. If price sustains above the mid-band (96,100), the upside band at Rs 98,400 becomes the next test.Price is well above both the 8-day and 21-day EMAs, with the fast EMA (8) above the slow EMA (21), confirming a bullish crossover. These moving averages will act as dynamic support zones in case of a dip. Bulls remain in control as long as price holds above Rs 96,000.A bullish crossover has just occurred, and the histogram has turned positive after weeks of decline. This strongly supports a fresh upward momentum and aligns with bullish continuation if price holds above Rs 96,000.On the fundamentals, the Russia-Ukraine War Escalation lends support to the yellow metal prices.Moreover, the uncertainty around tariffs remains which is expected to raise the haven appeal of gold.'Fed remains cautious on rate cuts, given ongoing uncertainty around global tariffs and internal US political instability. This contrast is supportive of gold as a hedge, though any Fed hawkishness may cap aggressive upside,' this analyst said.Data from the US will be a key indicator and this week remains macro-heavy, with multiple releases that could determine gold's next move.Fed Chair Jerome Powell's speech with dovish tilt could fuel a rally, the LKP Securities analyst said, adding that stronger job data could cap upside due to fears of persistent Fed tightening. A weaker data could become a trigger for Rs 98,400 breakout.The Indian rupee is expected to rise marginally on growing expectations of an RBI rate cut on June 6, which will be non supportive for MCX Gold. INR appreciation tends to decrease MCX gold prices even when COMEX gold is range-bound, Trivedi said.The technical structure, combined with a favorable geopolitical and domestic currency environment, continues to favor a buy-on-dips strategy. As long as gold stays above Rs 96,000, bulls have the upper hand.Buy near Rs 96,400–96,600 zone for a target of Rs 97,500/Rs 98,400/ Rs 99,300 and a stop loss of Rs 94,000 on closing basis.A decisive move above Rs 97,500 with volume could trigger a bullish breakout toward Rs 99,300 in the coming week(s). Macro data and Powell's tone will act as key short-term catalysts.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)