The adjacent chart shows the price movement of MCX gold continuous contract. Gold formed an impulse on the upside in its previous rally, which it witnessed in August. From the high of Rs.27,833, gold entered into a correction mode and retraced 61.8% of the rally. From the golden ratio mark, the yellow metal has jumped up. On the way up it has crossed a short-term falling trendline. The short-term momentum indicator has triggered a bullish crossover, whereas the medium term momentum indicator is already in a bullish mode. Thus, the up move is likely to develop into another impulse and gold can test the high of Rs.27,833 with a potential to surpass it. On the other hand, Rs26,585 will act as a key support on closing basis.
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