Upside for MCX Gold capped at ₹165,000; Silver may consolidate: Analysts

Commodity research analyst Nirpendra Yadav at Bonanza believes that the pullback in Gold and Silver prices is due to weak buying momentum, hence they may struggle to extend gains.

Technical analysts believe that Gold and Silver prices are witnessing weak buying momentum, so the pullback in prices has been short-lived.  Nirpendra Yadav, Sr. Commodity Research Analyst at Bonanza explains that Gold prices rebounded after a correction from all-time highs and formed a bullish Hammer candle, followed by a bullish candle on the weekly chart. 

Technical outlook on MCX Gold prices

However, a price rejection from highs (₹180,000 levels) suggests short-term exhaustion and establishes a new supply zone near ₹158,000 - ₹162,000 range, says Yadav. 

 

  Among the key momentum oscillators, the analyst flags that the weekly RSI has turned down from near the overbought zone (70+), to around mid 54 levels.  "The weekly MACD also shows a bearish crossover / histogram turning negative, indicating short-term weakness. A rebound in  prices from lower levels with average volumes on the weekly chart signals weak buying momentum which may cap the upside move," explains Yadav.  Going ahead, the ₹165,000 level is likely to act as a crucial resistance for Gold. The analyst expects fresh supply for Gold near the resistance level. Whereas, in case of a dip, Yadav anticipates support for Gold around ₹142,000 - ₹138,000 zone.  CHECK Stock Market LIVE Updates 

  Technical outlook on MCX Silver rates

  Similarly, in Silver's case the recent rebound in prices has been on lower average volumes, thus again signalling weak buying momentum, says the analyst from Mirae Asset Sharekhan. 

 

 

  "Formation of lower highs after the peak indicates short-term weakness. The weekly RSI is also seen cooling from overbought levels (>70) to near the 53 zone, which again indicates a loss of bullish momentum, and the MACD has given a bearish crossover confirming short-term downside pressure," explains Yadav.  Based on the current chart structure, the analyst expects the short-term trend for Silver to remain sideways, with resistance likely around ₹255,000, and support at ₹214,000.  Disclaimer: The views expressed by the brokerage/ analyst in this article are their own and not those of the website or its management. Business Standard advises users to check with certified experts before taking any investment decisions.