The Hindu Business Line : COMEX gold may test support, rise

Gold futures ended lower on Friday, as a rise in the dollar prompted profit taking ahead of a weekend. However, firmer oil prices and geo political tensions are expected to underpin prices and limit the fall. Oil rose above $62 per barrel to a three-month high on Friday after Iran seized 15 British Royal Navy personnel, raising concerns about renewed tension between the oil-producing nation and the West against the backdrop of the Islamic republic's nuclear dispute with the West.

COMEX gold futures moved higher in line with our expectations. Gold futures have made intra-day highs, but could not follow-through leading to sharp sell-off on Friday. A corrective dip to $652 or even lower to $645 levels can be expected before the resumption of the rally. Ideally, prices should find a base in the $648-50 region and resume the climb higher.

Unexpected drop below $644 could rekindle bearish expectations for a retest of recent lows or even lower. As mentioned earlier, the bigger picture is still within a broad consolidation preparing itself for a bigger move on the up side. We believe that the third wave could have ended at $732 and the recent fall has once again created doubts on whether a fifth wave impulse has begun or not. Then we could still be in a messy fourth wave move.

RSI is in the neutral zone indicating that it is neither overbought nor oversold. The averages in MACD are still below the zero line of the indicator suggesting bearish to be intact. Only a crossover of the averages above the zero line of the indicator will signal a clear bullish trend again.

Prices are above the short-term 8 period EMA at $656 followed by the 34 period EMA at $655.75. Therefore, expect gold to test support levels and rise higher again.

Supports are at $6,52,645 and 632. Resistances are at $6,60,668 and 675.

More Stories on : Technical Analysis | Gold & Silver

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
`New job market opening up for agri graduates'

Wheat harvest may touch 72 mt: Pawar

Holland in full bloom, always

COMEX gold may test support, rise

Palm oil may test resistance

`Cereals suffer annual losses of $5 b from warming climate'

`Follow experts' package of practices for better cashew yield'

High maize cost worries poultry farmers

NECC happy with more eggs in noon meal scheme

Agriculture Insurance Corpn prices coffee crop premium

Centre clears 20-lakh tonne sugar buffer, export sops

Impact of non-fundamental factors may continue in gold