Gold futures extended gains on Monday, driven by fresh spot demand from jewellers and retailers amid a positive trend in global markets. On the Multi Commodity Exchange (MCX), contracts for August delivery traded higher by Rs 570, or 0.39%, at Rs 1,47,773 per 10 grams. The business turnover stood at 577 lots, reflecting active participation from traders.
Factors Driving the Rally
Market analysts attributed the uptick to increased buying by jewellers for the ongoing wedding season, which typically boosts physical demand. Additionally, a weaker dollar and geopolitical uncertainties supported safe-haven buying. Globally, gold prices edged higher as investors awaited US economic data for further cues on interest rate trajectory.
According to a PTI report, spot gold in international markets was trading near $2,350 per ounce, gaining 0.3% during the session. The rise in domestic futures mirrored the global trend, with the August contract maintaining a premium over international prices due to import duties and rupee depreciation.
Technical Outlook and Trading Range
From a technical perspective, the August gold contract has support at Rs 1,47,200 and resistance near Rs 1,48,500. Analysts suggest that sustained buying above Rs 1,47,500 could push prices towards the upper band. However, profit-booking at higher levels may cap gains.
The MCX reported total traded volume of 577 lots for the August contract, indicating moderate liquidity. Open interest data showed a marginal increase, hinting at fresh long positions being built. Market participants are now eyeing US non-farm payroll data due later this week, which could influence the dollar index and, consequently, gold prices.
Impact on Investors and Jewellery Sector
The rise in gold futures is positive for investors holding long positions, while jewellers may face higher procurement costs. However, the wedding season demand provides a cushion, as consumers tend to absorb price increases during auspicious periods. The Reserve Bank of India's gold buying program and central bank purchases globally also underpin prices.
Analysts recommend a cautious approach, advising investors to book partial profits near resistance levels. For the near term, gold is expected to trade in a range of Rs 1,47,000 to Rs 1,48,500 on MCX, with a bullish bias if global cues remain supportive.
