Commodity Radar: Overbought gold hits fresh peak of Rs 96,747 per 10 gram. Signals suggest caution

Gold has been an outlier among asset classes breaking all records in this year so far. The yellow metal has surged nearly 26% or by Rs 19,000 per 10 gram in 2025 amid a boost to its safe haven demand on the back of economic uncertainties and Trump's reciprocal tariffs flip-flops.

He has now opened another front with the Federal Reserve Chair Jerome Powell to cut interest rates.

Jateen Trivedi, VP Research Analyst - Commodity and Currency at LKP Securities said that gold remains a hedge against the global economic uncertainty and the ongoing tariff war between China and the US will keep the bullion metal prices on the edge, as he also pointed out the rally that has brought into overbought zone.


On Monday, gold hit a fresh lifetime high of Rs 96,747 per 10 gram, jumping by nearly Rs 1,600. On the Comex, gold futures were trading at $3,391.90, up by $63.50 or 1.91% around 9:30 am India time.

Tech view

Commenting on the price action and key resistance levels that gold could face going ahead, Trivedi said that COMEX Gold is trading in the critical resistance zone of $3,350-3,400 per troy ounce. Gold is currently hovering near Rs 96,000 in MCX, with .

"This marks an overextended price move from a historical perspective. On the downside, ₹93,000 remains an immediate support level. Sustaining above this zone keeps the short-to-medium term bullish structure intact.

The Relative Strength Index's (RSI) negative divergence signals exhaustion, said this analyst. "On the daily timeframe, RSI is showing signs of negative divergence—falling from its peak while prices continue to move higher—signaling a potential loss of bullish momentum. However, RSI still holds above the 70 level, which keeps the broader trend positive in the near term. A break below 70 could confirm weakening momentum,” he said.

“Gold is trading close to the upper bollinger band, indicating a possible cooling off in momentum. Although band width remains expanded, any sharp reversal from the upper band may signal mean reversion or sideways consolidation in the near term," Trivedi added.



Among other signals, the 21-day EMA, currently near Rs 93,000, continues to offer dynamic support to the price. As long as prices trade above this EMA zone, the bullish bias remains.

Trivedi, however, warns that a close below this could lead to corrective pullbacks toward Rs 91,000 or lower.

While MACD continues to stay in bullish territory with a positive crossover, the histogram is showing signs of flattening, implying the trend strength may be reducing, he warned, underscoring that any bearish crossover will be an early reversal signal.

Fundamental set-up

Fundamentally, gold remains well-supported due to persistent geopolitical risk. Tariff hikes by both the US and China—along with the possibility of the EU entering the fray, have heightened fears of a global economic slowdown.

The US macroeconomic releases like Manufacturing & Services PMI and Home Sales data will be key trigger events, the LKP Securities analyst said.

On the domestic front, the trajectory of rupee versus the US dollar will be an important factor impacting import prices.

Strength in the Indian Rupee due to sustained FII inflows is capping domestic gold price gains to some extent. In INR terms, gold is only 1% away from its all-time high, whereas in COMEX terms, it still has 2.5% upside left to the record high—indicating currency is a critical factor for traders to watch.

Outlook

While the broader trend remains bullish, overbought technical indicators, weakening momentum, and high volatility call for a disciplined, risk-managed trading approach. Traders are advised to adopt a buy-on-dips strategy with tight stop losses, keeping a close eye on global data and currency fluctuations.

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