Commodity Radar: US-Venezuela tensions lift gold, but charts signal consolidation. Buy or sell?

Domestic gold prices jumped by over Rs 2,400 per 10 gram or 1.8% on Monday to hit the day’s high of Rs 1,38,200 after the US-Venezuela conflict gave fresh impetus to bullion’s safe haven appeal. The yellow metal rates moved more sharply on the COMEX, rallying 2.3% intraday after previous week’s volatility pushed it below the $4,500 mark.

The February gold futures on the MCX were trading around, Rs 1,37,671, around 1:40 pm, gaining Rs 1,910 while the price on COMEX read $4,431, gaining by $101 an ounce over the Friday closing price.

Notwithstanding the day’s gains, the gold contracts are trading below their lifetime high of Rs 1,40,465.

Expert Jateen Trivedi expects gold to remain volatile but structurally positive in the near term. However, the Vice President – Research Analyst at LKP Securities finds it imperative for gold to have follow-through buying for momentum to continue as prices are entering a short-term consolidation zone after the recent rally.

Rupee weakness continues to act as a supporting factor for gold and Trivedi warns of volatility in bullion prices because of rupee movement.

The INR recovered from its life time lows to sub-90 levels and has again breached that mark.
“Persistent rupee volatility is keeping MCX gold relatively more volatile than Comex. Any renewed weakness in the rupee can further cushion downside risk and support domestic gold prices,” the LKP Securities analyst said.In his views, these 4 technical triggers remain a key while making a trading view:

1. Key support and resistance levels

Price structure continues to hold a higher high–higher low formation, indicating that the broader trend remains bullish. Immediate resistance is seen near Rs 1,38,500, followed by the psychological Rs 1,40,000 zone, Trivedi said, adding that Rs 1,36,500 remains a crucial short-term support,

while Rs 1,34,500 acts as a strong trend-defining base.

“As long as prices hold above Rs 1,34,500 on a closing basis, the bullish structure stays intact,” he added.

RSI is placed near 58–60, indicating healthy momentum without being overbought. This suggests there is room for upside continuation after minor pullbacks, supporting a buy-on-dips approach rather than chasing highs. Prices are trading above the mid-band, with bands slightly expanding. This indicates trend continuation with controlled volatility. Any retracement toward the middle band is likely to attract buying interest.

The EMA 8 is acting as immediate dynamic support near Rs 1,36,800, while the EMA 21 near Rs 1,35,500 continues to provide strong medium-term support. The positive slope of both averages confirms bullish bias.

4. MACD

MACD remains in positive territory, though momentum has flattened slightly. This signals consolidation rather than trend reversal, keeping the upside bias intact as long as MACD stays above the zero line.

Trivedi recommends a buy on dips strategy with a buy zone around Rs 1,36,500. He places the stop loss below Rs 1,34,500 with a target of Rs 1,38,500/Rs 1,40,000.

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