Gold has long been a cornerstone of investment and cultural significance in India. From weddings and religious rituals to financial security, the value of gold runs deep in the country’s history.
As an investment asset, it has consistently been perceived as a hedge against inflation, a safe haven in times of economic instability, and a symbol of wealth and prosperity. However, with gold prices at Rs 85,000 per 10 grams, many question whether it is still worth investing in gold.
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Is the gold rate today too high, or does gold still hold the potential for returns in the coming months? To understand this, we need to look beyond the cultural significance, considering the market trends and charts that provide insights into the current gold price movement.
Gold Monthly Chart
Source: TradePoint
The monthly chart of continuous contracts for MCX Gold Futures offers a promising view for long-term investors. A clear series of strong, long, bullish candles indicate a sustained upward trend, suggesting that the gold price has been moving upward for a considerable time. The advantage of such strong trending candles is that their lows often act as strong support levels in the future.
On the lower panel of the chart, the Relative Strength Index (RSI) shows a bullish range shift. The RSI is a momentum indicator and its bullish range shift signals that the upward trend may continue. When the RSI is above 60 and moving higher, it suggests strength in the trend. In this case, the RSI confirms the strong bullish trend, indicating that, from a medium-term perspective, gold prices are expected to remain on the rise.
Thus, the monthly chart supports the idea that the medium-term trend for gold potential remains bullish, making it a favourable asset for investors looking to ride the trend in the coming months.
Gold Daily Chart
Source: TradePoint
Shifting to the daily chart, we see a more nuanced picture. Gold has encountered resistance at a rising channel pattern around the Rs 86,500 level. This resistance at higher levels suggests that the price is consolidating rather than sharply reversing, indicating time correction rather than price correction. The fact that the price has not sharply reversed after hitting the resistance is important—it suggests that the market is still in a strong demand zone and might be preparing for another move higher once the consolidation phase ends.
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