Gold Prices Expected to Trade in a Range; LKP Securities Analyst Suggests Buy-on-Dips Strategy

Jateen Trivedi, VP Research Analyst - Commodity and Currency at LKP Securities, predicts that gold prices will likely trade in a range with a neutral bias. Following recent volatility, gold prices have consolidated below the ₹1,22,400 resistance zone. Technical indicators such as the convergence of 8 EMA and 21 EMA, and an RSI near 51, indicate neutral momentum. The MACD shows minor positive divergence, suggesting buyers are defending support near ₹1,20,750.

Key support levels are identified at ₹1,20,750 and ₹1,19,970, with resistance at ₹1,22,450 and ₹1,23,590. Traders may consider a buy-on-dips approach above ₹1,20,700, setting a stop-loss below ₹1,20,500, targeting ₹1,22,000–₹1,22,400. The overall outlook is neutral to mildly bullish, with the range expected to be ₹1,20,700 – ₹1,22,450.

Impact: This news is significant for commodity traders and investors focused on the gold market. While it doesn't predict a direct, sharp movement in the broader Indian stock market, significant fluctuations in gold prices can influence inflation expectations, investor sentiment, and the performance of gold-related investment products, potentially having an indirect effect. Rating: 5/10.

Difficult Terms: EMA (Exponential Moving Average): A technical indicator that calculates an average price over a period, giving more weight to recent prices to identify trends. RSI (Relative Strength Index): A momentum indicator used in technical analysis to evaluate overbought or oversold conditions in the market. A reading near 51 suggests neutral momentum. MACD (Moving Average Convergence Divergence): A trend-following momentum indicator that shows the relationship between two moving averages of a security’s prices. Bollinger range: A volatility indicator consisting of upper and lower bands placed above and below a simple moving average. Price action within the mid-Bollinger range signifies equilibrium. Pivot perspective: A technical analysis method used to identify potential support and resistance levels based on previous trading sessions' high, low, and closing prices.