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Gnanasekar T.

Gold futures settled higher on Friday driven by inflationary fears after a jump in US consumer price data and a surge in crude oil prices to 10-month highs.

COMEX gold futures have risen higher after testing the support levels. There is still some hope for an attempt to cross $700 if supported well at $640.

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 bearishness. Positive divergences in indicators warn of a bullish reversal in the offing. Prices are above the short-term 8-day period EMA at $658 indicating bearishness followed by the 21-day period EMA at $663. Therefore, expect gold futures to consolidate and rise higher.

Supports are at $654, 648 and 642. Resistances are at $665, 674 and 682.

(The author is the Director of Commtrendz Research and also 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.)

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