Commodity Radar: As gold holds near Rs 1.5 lakh support, NFP data to decide next breakout. Buy-on-dips strategy emerges

Gold prices hovered in a tight range after a brief corrective phase, as the metal attempts to build a base near key support levels. The yellow metal's weakness is on account of inflation worries and a stalemate in the Iran-US negotiations. On Monday, June gold futures fell by Rs 1,260 or 0.8% per 10 gram to hit the day's low of Rs 1,50,093.

Cues from global markets also remained negative, with COMEX gold prices falling by $25.70 or 0.56% an ounce to $4,603.90.

"Gold is currently trading around Rs 1,50,400, showing sideways consolidation after a mild corrective phase, with price attempting to stabilise near support. The structure suggests base formation with cautious recovery, while major triggers this week remain US Nonfarm Payrolls and unemployment data, which can sharply impact gold direction," Jateen Trivedi, Vice President, Research Analyst at LKP Securities, said.


As historically seen, strong NFP data supports the dollar and pressures gold, while weak data boosts gold due to rate-cut expectations, he said.

On rupee volatility, the LKP analyst said INR movement remains a key factor, and any rupee weakness could accelerate upside towards targets, while strength may cap rallies.

Decoding the technical charts, he listed 5 indicators to watch out for:

1) Key support & resistance

Price is consolidating above short-term support, indicating accumulation after the decline.

Immediate support: Rs 1,50,000 to Rs 1,50,200
Major support: Rs 1,48,000
Immediate resistance: Rs 1,51,200
Major resistance: Rs 1,53,500

Holding above Rs 1,50,000 keeps the recovery structure intact.

2) Momentum indicator

RSI is near 40 to 41, indicating weak momentum but stabilising from oversold levels. This supports bounce potential rather than a fresh breakdown.

3) Bollinger bands

Price is near the lower to mid band, showing volatility contraction after selling. This setup typically leads to mean reversion towards the upper band (Rs 1,52,500 to Rs 1,53,500).

4) Moving averages

EMA 8 (Red): Acting as immediate resistance
EMA 21 (Yellow): Slightly downward but flattening

Price attempting to reclaim EMA 8 is an early sign of recovery.

5) MACD

MACD is in negative territory but flattening, indicating bearish momentum is fading. A potential crossover can support short-term upside.

Gold trading strategy

Trivedi suggests a buy-on-dips strategy in the range of Rs 1,50,000 to Rs 1,50,200, with a stop loss of Rs 1,48,000 on a closing basis and a target of Rs 1,53,500.

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