The Hindu Business Line : COMEX gold could test support

Gold futures tanked lower on Friday, after the dollar surged on a surprisingly strong US jobs data. Weekend profit-taking, weakening oil prices and a strong US data pushed the dollar higher.

The beginning of the year saw a sell-off on all commodities starting from base metals, followed by crude and finally in precious metals. . Comex gold futures moved perfectly in line with our expectations. There was deception on the first trading day as futures initially broke through key resistance at $645 and then slid sharply from there. As mentioned in the previous update, the recent rally happened in thin volumes and favoured a fall to $610 levels and our view stands vindicated.

The fall could now continue lower to the $578-80 levels being the rising channel support point. We anticipate the bullish trend to begin from there again. Pullbacks to $625-27 are now expected to cap advances for a fall lower to $ 598 initially followed by the important support at $578-80. 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 have gone below the zero line of the indicator suggesting bearishness. Prices are below the short-term 8-day period EMA at $625 followed by the 34-day period EMA at $627. Therefore, look to test the test the support levels in the coming week. Supports are at $603, 595 and 580. Resistances are at $615, 627 and 632.

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