The prediction by Manav Modi, Senior Analyst Commodity Research at Motilal Oswal Financial Services Ltd. is that gold prices might go back again to the recently established support zone of ₹137,000 and ₹138,000.
The analyst opines that one should use dips in prices as an opportunity to buy gold. He offers his opinion and advice for the gold investors along with the key technical levels for the near future.
Gold prices are still stable and keeping close to the $4,500 mark at COMEX. On the other hand silver has been going up really strong and has been backed up by less supply, more industrial customers and the whole market being uncertain.
The latest US economic data showed that inflation was coming down and the labor market was getting softer which strengthened the call for several rate cuts next year despite GDP growth being surprisingly good.
Gold prices following their usual pattern are slowly but surely moving upwards and have even reached a new peak of ₹140,000 after breaking out of the consolidation that lasted a week at the ₹135,000 level.
The overall technical picture still supports a buy-on-dips approach with staggered investments being the preferred method.
There is a chance that the prices will go back and try the recently established support area between ₹137,000 and ₹138,000 again.
After the breakout prices have been moving in the upper range of the Bollinger Band which is a sign of the market still being supportive and the mid-band around ₹135,000 is providing immediate support which may result in a stop.
Any pullbacks will be seen as opportunities to add more and if a clear break above ₹140,000 happens it will lead up to ₹143,000–₹145,000 as the next targets.
It will be a week shortened by holidays because of New Year but there are still some key events in the calendar. The listening ear will be on the US industrial production, housing numbers and FOMC meeting minutes.
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