Commodity Radar: Gold in a sideways trend after a 26% correction from its peak; warrants a sell-on-rise strategy

Gold price has corrected by nearly 26% or Rs 53,000 per 10 gram from its all-time high of Rs 2,02,984 on the MCX and the yellow metal continues to move sideways amid lack of triggers. The precious metal traded with sharp cuts on Tuesday as investors remain cautious ahead of the Federal Reserve's policy outcomes due to be announced on Wednesday.

The Federal Open Market Committee (FOMC) begin its two-day, meeting today. The Central Bank is expected to hold rates steady at 3.50-3.75%.

Gold's June futures today corrected by over Rs 3,000 or 2% to hit the day's low of Rs 1,48,681.


Jateen Trivedi, Vice President, Research Analyst at LKP Securities said the June contracts are stuck in a sideways-to-weak structure after a sharp corrective phase, with price stabilising near Rs 1,52,000. The broader trend shows loss of bullish momentum and formation of lower highs, indicating rallies are likely to face selling pressure, he added.

Among the domestic factors, weak rupee vis-a-vis the US dollar will support gold prices on the MCX meanwhile, its strengthening will further dent gold's appeal, Trivedi said.

"Fundamentally, gold remains in a high-volatility macro environment as elevated inflation will diminish chances of a rate cut. While geopolitical tensions (US–Israel–Iran), FOMC outcome, GDP data and core PCE Price Index may drive sharp moves but current structure favors caution or sell-on-rise bias," the LKP analyst said.

5 indicators before making a trade:

1) Key support & resistance

Price has rebounded from lower levels but is struggling to sustain above short-term resistance, indicating supply is rising. Immediate resistance is seen at Rs 1,52,500 – Rs 1,53,000 while major resistance is at Rs 1,55,500.

Immediate support is placed at Rs 1,50,000 while major support at Rs 1,48,500. The current chart structure indicates a range with a downside bias, favoring a sell-on-rise approach, Trivedi said.

2. Momentum indicators

RSI (14) is near 49–50, reflecting neutral momentum. Failure to move above 55 suggests lack of strong buying strength and supports a cautious/bearish stance.

3. Bollinger Bands

Price is hovering near the middle band, indicating consolidation after earlier volatility. Bands are flattening, which typically precedes a directional move—currently skewed slightly downward.

4. Moving averages

EMA 8 (Red): Flattening and acting as immediate resistance
EMA 21 (Yellow): Slightly downward, reinforcing the resistance zone near Rs 1,53,000. Price trading around/below these EMAs signals a lack of trend strength.

5. MACD

MACD remains near the zero line with a weak histogram, indicating fading bullish momentum and absence of strong trend continuation.

Gold trading strategy

Trivedi recommends a 'sell on rise' strategy in the zone of Rs 1,52,500 – Rs 1,53,000 with a stop loss above Rs 1,55,500 on the closing basis. The target is Rs 1,48,500.

Gold is likely to face resistance on rallies, and as long as it remains below Rs 1,53,000, downside toward Rs 1,48,500 remains probable, Trivedi said.

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