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COMEX gold futures tested supports and rose higher in line with our expectations. We can now expect prices to rise higher towards $662-665 levels as long as $645 caps any downside attempts. Immediate resistance will be seen at $658 level. We see a possibility of this current rally to extend even towards $668 levels, which could signal a premature end of this correction and then rally to continue higher towards $680 levels. Only a failure to cross $680 will signal the retur n of bears. As mentioned earlier, the overall bullish price structure could weaken only below $634-35 levels and such a fall could lead prices back towards $555 levels. We believe that the third wave could have ended at $732 and the current move being a fourth wave consolidation and the beginning of a fifth wave impulse will be confirmed above $698. 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. Therefore, expect gold futures to rise higher.

Supports are at $648, 645 and 642. Resistances are at $658, 665 and 674.

Gnanasekar. T

(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 p rice movements and there is risk of loss in trading. He can be reached at gnanasekar_thiagarajan@yahoo.com.)

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