Commodity Radar: Is Gold’s RSI of 75 spelling trouble, and should you buy or sell yellow metal now?

Gold’s glow brightened on Monday as prices surged to a fresh lifetime high of Rs 1,16,203 per 10 grams, following international market trends. A weaker rupee against the US dollar further boosted domestic returns, outperforming gains in overseas markets.

Around 1:40 PM on Monday, the December gold futures were trading at Rs 1,15,801 on the MCX, gaining by Rs 910 or 0.8%. Meanwhile, on the COMEX, the yellow metal prices were hovering around $3,836 per troy ounce, up by $27 or 0.71%.

Economic uncertainties due to US tariff policies, geopolitical tensions and the dollar’s weakness against a basket of six major currencies have supported gold prices.

While gold is hitting new peaks consistently, Jateen Trivedi, Vice President, Research Analyst at LKP Securities, said that gold is pricing in the trade tariff concerns and the US Fed’s 25 bps rate cut, with further cuts expected on weak payrolls data. However, global uncertainty continues to support safe-haven demand, he added.

Going ahead, key focus will be on non-farm payrolls and jobless claims, which will guide the Fed’s next steps.

Among the domestic factors, rupee remains under pressure due to US tariffs on India, adding extra support for MCX gold prices, the LKP analyst said.Trivedi analyses gold’s likely trajectory on the technical charts and recommends the strategy for the traders. He suggests 5 technical indicators to watch out for:

Gold December futures surged strongly last week and are now holding above Rs 1,15,000. Key support lies at Rs 1,13,800 – Rs 1,14,000, while immediate resistance is seen at Rs 1,16,500 and next at Rs 1,17,200. Price action suggests buying momentum remains intact as long as Rs 1,13,800 holds.

The Relative Strength Index (RSI) is near 74–75, signalling an overbought zone, but still sustaining above 70, which reflects strong bullish momentum.

Price has broken above the upper Bollinger band, confirming strong upside momentum. However, this also suggests the possibility of short-term volatility or mild retracement.

The shorter EMA (8) is comfortably above the EMA (21), confirming bullish trend continuation. Any dip toward EMA 8 near Rs 1,14,300 – Rs 1,14,400 will act as a strong buying opportunity.

MACD line remains above the signal line with positive histogram bars, supporting continuation of bullish momentum in the near term.

Trivedi recommends a buy on dips strategy near Rs 1,15,000 with a stop loss at Rs 1,13,800 (closing basis) and a target of Rs 1,16,500 initially. Sustained trade above Rs 1,16,500 can extend gains towards Rs 1,17,200.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)