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Gold prices tumbled last month following a stronger dollar. The MCX-gold futures contract made a high of ₹31,376 per 10 gm and has slumped over 10 per cent from this high. The 100-week moving average at ₹27,921 is a crucial support . Whether the contract breaks below it or reverses higher will decide the next leg of move. A strong break and a decisive weekly close below ₹27,921 may drag the contract lower to ₹26,500 or ₹26,250. But if the contract manages to sustain above the 100-week moving average support and reverse higher, the downside pressure will ease slightly. A corrective bounce to ₹28,500 or ₹29,000 is possible in such a scenario. Inability to break above ₹29,000 may keep the contract inside the ₹27,900-29,000 range in the near term. But a strong break above ₹29,000 may turn the short-term outlook bullish. Such a break will increase the likelihood of the contract rallying to ₹30,000 and ₹31,000.
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