The Hindu Business Line : Comex gold: Downtrend may continue

Gold futures fell to a two-week low on Friday, on a volatile day, which saw choppy trade on the back of a reversing dollar. A solid US jobs data and remarks made by the US treasury secretary on Chinese yuan triggered dollar buying, which resulted in gold prices falling lower. Gold could move down further toward the end of the year, usually a time when investors and funds lock in profits for the year.

Comex gold futures fell lower after failing to follow through higher above the $650-mark. Prices are expected to consolidate in the $628-636 range and fall lower again towards $615 levels from where a good bounce higher can be expected.

Initial support will be strong at $625 levels. And only a close above $643 will hint at further strengthening which we do not favour presently. We believe that the third wave could have ended at $732 and the corrective fourth wave still in motion. Break above $678 will signal the beginning of the fifth wave move. RSI is in the neutral zone indicating that it is neither overbought nor oversold. The averages in MACD are above the zero line of the indicator suggesting a bullish reversal. Only a cross-over of the averages below the zero line will signal bearishness again. Prices are below the short-term 8 period EMA at $627 followed by the 34 period EMA at $639. Therefore, look for Comex gold to consolidate and test the support levels. Supports are at 625, 618 & 615. Resistances are at 638, 643 & 658.

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