Is it the right time to invest in gold?

Is it the right time to invest in gold?

by 5paisa Research Team Last Updated: Nov 15, 2021, 03:46 PM IST

Gold has been consolidating downwards over the past 14 months. But last week, it gave a breakout. So, is it the right time to invest in gold? Let’s find out.

MCX Gold has been in a good rally ever since January 2017. It went all the way from 27,887 to make a high of 56,191 in August 2020. However, ever since MCX Gold has been moved into a downwards consolidation on weekly charts. In fact, on the lower time frames, it has already begun making lower highs and lower lows. Having said that, last week it breached out of the 14-month-old consolidation showing strength for the strong bullish momentum. Apart from this it also breached one of its crucial resistance levels of 48,635 and is currently trading above the Fibonacci level of 23.6% (level of 48,730) which is now acting as its immediate support level.

The Relative Strength Index (RSI) is presently trading at 62 which is above its 9-Day Exponential Moving Average (EMA) of 55. Moving Average Convergence Divergence (MACD) is trading near the neutral line with positive bias. The Rate of Change (ROC) also gave breakout after 14 months and is currently trading at 7.11 which is near its six months high. MCX Gold is trading above its Parabolic SAR for the past three to four weeks now.

As of now for MCX Gold, its immediate support and resistance level is placed at 48,635 and 49,716, respectively. Moreover, some of the important levels on the upside are 52,520-55,449-56,191. On the downside, the range of 44,115-45,589 works as crucial support. Breaching the abovementioned levels on either side would decide the mood for gold. Towards northwards, breaching of 51,620 level would mean strong bullishness is knocking on the door for Gold. Therefore, it is quite important to track these levels for MCX Gold.

At the time of writing, the MCX Gold was trading at 49,208 levels.

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SENSEX
54,326.39
1,534.16 (2.91%)
Nifty 50
16,266.15
456.75 (2.89%)
Nifty Bank
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960.75 (2.88%)

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