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Gold futures ended higher on Friday, ahead of a long-weekend maintaining the bullish trend intact. Precious metals are failing to react to anything negative. Neither dollar strengthening nor falling oil prices has had any major effect on bullion this week.

Prices are seen consolidating in a range. A spot of bother could be a huge build-up in speculative long positions. Barring that gold is expected to take out recent highs and head higher.

COMEX gold futures are seen consolidating a broad range, most probably preparing itself for the next big move. Initial resistance at $676-78 levels needs to be taken out first. Important support is now at $664-65 levels followed by $656-58 levels.

A move above $682 will be a decisive move targeting recent highs at $725 again. However, a near-term resistance is at $ 692-95, before the psychological resistance at $700 is tested.

We believe that the third wave could have ended at $732 and the corrective fourth wave still in motion. Break above $678-81 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.

Prices are above the short-term 8-day period EMA at $660 followed by the 34-day period EMA at $643. Therefore, expect gold to test the resistance levels.

Supports are at $668, 664 and 658. Resistances are at $678, 682 and 692.

(The author is a director at Commtrendz Research and in the advisory panel of Multi Commodity Exchange of India Ltd (MCX). The views expressed in this column are his own and not that of MCX.

This analysis is based on the historical price movements and there is risk of loss in trading. He can be reached at gnanasekar_thiagarajan@yahoo.com.)

Gnanasekar.T

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