Commodity Radar: Gold’s record rally may extend, with 11% weekly gains seen ahead of Diwali — 5 signals to watch

Gold prices surged over 2% or by Rs 2,600 per 10 gram on Monday after a fresh flare-up between the US and China, with President Donald Trump threatening to impose 100% tariffs on Chinese goods in the United States. Today’s rally in the yellow metal prices was in line with the uptick in safe haven appeal in the international markets.

The December gold futures were trading at Rs 1,23,840 on the MCX, gaining Rs 2,476 or 2.04% over the Friday closing price. Meanwhile, on the MCX, gold was trading around $4,095.60 per troy ounce, up by $95.20 or 2.4%.

“Gold continues to price in the effects of trade tariffs and the Fed’s 0.25 bps rate cut, with expectations of further easing amid weaker jobs and payroll data. The environment of declining yields and macro uncertainty continues to support gold’s medium-term outlook,” Jateen Trivedi, Vice President, Research – Commodity at LKP Securities, said. He puts the onus on CPI and retail sales data to determine the direction of gold during the week.

On the domestic factors, the rupee remains a strong support for bullion. A weaker rupee against the US dollar is positive for the bullion prices.

“Rupee weakness persists as US tariffs on Indian exports weigh on sentiment, indirectly boosting MCX gold due to currency depreciation,” Trivedi said.

1) Key support & resistance

Gold December futures witnessed consolidation after a sharp rally, currently hovering near the Rs 1,21,500 levels. Immediate support is placed at Rs 1,20,800, followed by Rs 1,19,165 – Rs 1,17,932, while resistance lies at Rs 1,23,861 and Rs 1,24,850. The recent price action shows a pullback from overbought levels, but holding above mid-Bollinger levels indicates the uptrend remains intact as long as Rs 1,20,800 holds.

The RSI stands around 50.5, reflecting neutral momentum after cooling off from overbought territory. A move above 55–60 may trigger renewed bullish momentum, whereas sustained trade below 48 could invite short-term selling pressure.

Prices are consolidating near the middle band after touching the upper band around Rs 1,24,850. The upper band resistance at Rs 1,24,800 and lower band support near Rs 1,17,900 define this week’s volatility zone. A breakout beyond these levels will confirm the next directional move.

Currently, EMA 8 is flattening but still above EMA 21, suggesting the broader trend remains bullish, though momentum has paused. If gold sustains above the short-term EMA zone of Rs 1,20,800 – Rs 1,21,000, it will likely resume upward movement toward Rs 1,23,800 and above.

MACD line remains below the signal line but shows signs of narrowing histogram bars, indicating that bearish momentum is fading and a possible bullish crossover may occur in the coming sessions.

Gold remains in a consolidation phase but retains a bullish bias above Rs 1,20,800, says the LKP analyst. He recommends a ‘buy on dips’ strategy near Rs 1,22500 – Rs 1,22,000, with a stop loss of Rs 1,20,000 and targets of Rs 1,24,500 – Rs 1,25,200. However, a sustained trade below Rs 1,19,800 may shift the bias mildly negative toward Rs 1,18,000.

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