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Gold Technical Outlook 22.05.2014

Gold June contract on MCX inched 813 rupees down to settle at 27373. Metal has witnessed a sharp decline and headed intraday low of 27341 as we were expecting. 28000-28300 were key support in this metal that has penetrated with good volumes indicating more weakness. Today price objective for bulls would be 28277 and then 28350 any sustained move above 28350 would bring some charm in this counter otherwise gold is expected to remain bearish and has potential to hit 26400 levels during this decline. Support is now seen near 27341 any failure of this level would bring some weakness and then we will see decline towards 27100-26800 and more down side.

Trading range for the day is expected among the key support at 27300 and resistance at 28300.

Recommendation:

·         Today again selling gold on jumps around 27700-27800 with stop loss above 28350 for targeting 27200-26400 and more down side might be appropriate in short term.

·         In alternative scenario selling below 27340 with stop loss above 27450 for targeting 27230-27100 and more down side. 

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