Glittering metal: Is gold all set to shine?
Since January 2017, MCX Gold has been in a good uptrend, rallying all the way from 27,887 to making a high of 56,191 in August 2020. But, since then MCX Gold has been trading southwards in consolidation on weekly charts. In fact, on the smaller time frames, it has already begun to show lower highs and lower lows. All in all, last week it broke out from this 14-month-old consolidation depicting strength and a beginning of strong bullish momentum. Not just that, but it also broke one of its crucial resistance levels of 48,635. MCX Gold is currently trading above one of the important Fibonacci levels of 23.6 per cent (level of 48,730) which now would as its immediate support.
Above is the weekly chart of MCX Gold.
Technical indicators such as Relative Strength Index (RSI) is trading above its 9-Day Exponential Moving Average (EMA) of 55 at 62. Moving Average Convergence Divergence (MACD) is trading near the neutral line with positive bias. The Rate of Change (ROC) too breaks out after 14 months and is currently trading at 7 which is near its six months high. And from the past three to four weeks now MCX Gold is trading above its Parabolic SAR.
The immediate support and resistance levels for MCX Gold is placed at 48,635 and 49,716, respectively. Some of the most crucial levels on the upside that you should have your eyes on are 52,520-55,449-56,191. On the downside, the range of 44,115-45,589 would work as a major support level. MCX Gold penetrating the abovementioned levels on either side would decide the further direction for gold. In the upwards, breaking of 51,620 level would mean that a strong bullish move is there to come.
At the time of writing, the MCX Gold was trading at 49,208 levels.