Commodity Radar: Gold choppy ahead of US inflation data. Sell on rise for these targets?

The yellow metal traded with cuts on Monday tracking global cues despite the rupee hitting fresh lows. Prime Minister Narendra Modi’s message to citizens to avoid buying gold for a year dented the confidence of domestic investors.

The June gold futures dropped 0.7% or by Rs 1,030 per 10 gram today to hit the intraday low of Rs 1,51,500 even as INR, which tested a bottom of 95.31, witnessed its sharpest fall in a month.

Rupee’s fall against the greenback is considered supportive for bullion.

“MCX Gold is expected to remain volatile with a slightly negative bias during the week as traders focus on crucial macro developments including US CPI inflation data, Trump’s visit to China, and ongoing US-Iran negotiations,” Jateen Trivedi, Vice President, Research Analyst at LKP Securities said, adding that the market is currently trading near the Rs 1,52,000 – Rs 1,53,000 zone where repeated resistance is being witnessed, indicating profit booking at higher levels after recent recovery attempts.

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While geopolitical uncertainty and currency volatility continue to support prices intermittently, the overall technical structure suggests that upside may remain capped unless Gold decisively sustains above Rs 1,55,500, he added.
What fundamentals suggest?According to Trivedi, CPI inflation data will remain the biggest trigger for bullion markets this week as softer inflation can revive expectations of future Federal Reserve rate cuts, while hotter inflation may strengthen the dollar and pressure precious metals.

Moreover, Trump’s China visit is likely to be keenly watched for any trade or tariff-related developments which may influence risk sentiment globally, the LKP analyst said.

Among the positive triggers, uncertainty surrounding US-Iran talks will likely keep the safe haven appeal of bullion intact.

“Rupee volatility is also expected to keep MCX Gold comparatively more volatile than COMRX Gold in the near term,” Trivedi said.

Technical triggers

Decoding the charts, Trivedi said RSI is hovering near the 52 zone, indicating neutral momentum with slight recovery signs but still lacking strong bullish confirmation. Additionally, bollinger bands remain relatively narrow, suggesting volatility compression and possibility of a sharp move once major US data releases trigger fresh positioning.

“EMA 8 continues to trade marginally below EMA 21, reflecting that short-term trend remains weak and every upside bounce may attract selling pressure unless stronger buying momentum emerges. MACD has shown minor improvement in histogram formation, but the indicator still remains in negative territory, suggesting broader momentum continues to favor cautious or sell-on-rise trading strategies,” this analyst said.

Gold trading strategy

The commodity expert suggested a ‘Sell on rise’ strategy near Rs 1,53,000 – Rs 1,53,500 with a stop loss above Rs 1,55,500 on a closing basis for downside targets of Rs 1,50,000 and Rs 1,48,500.

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