MCX gold trend likely to remain higher, but traders must wait for dip around 51500-51200 for fresh trade By Bhavik Patel Gold and silver saw solid gains yesterday after the U.S. consumer price index report for October came in up 7.7%, YoY, versus expectations for a rise of 7.9%, YoY as compared to the 8.2% rise seen in the September report. The CPI report had a profound impact on market sentiment sending ripples through asset classes across the board where all asset classes including equity, commodity and cryptocurrencies soared. The US dollar had a steep selloff giving up 2.45% with the dollar index trading at 107.75. Gold bulls took a breather as slightly cooler CPI may influence the Federal Reserve’s decision-making process ahead of its December FOMC meeting. In MCX, gold is at 1 month high and facing the resistance of 52200. RSI_14 is at 66 so there is room for the upside but the market may digest some gain after a rally this week to make a base before propelling further upside. Market which was neutral has shifted into bullish territory and now the market theme is buy on dips or accumulate at every sharp correction. Major support comes around 51000 where there is a confluence of moving averages namely 20 and 200-day moving average while the 50-day moving average is also not very far. We already had a crossover of 20 and 50-day moving average three trading sessions before so the trend is expected to remain higher albeit after some profit booking and price retracement. We would advise traders who had held a long position to book some profit and take advantage of the sharp up move while traders looking for fresh trade should wait for a dip around 51500-51200 in MCX to take a long position with expected target of 52300-52500 and stoploss of 51000. (Bhavik Patel, Commodity/Currency analyst, Tradebulls Securities. Views expressed are the author’s own.)
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