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Comex gold futures ended lower on Friday on profit-booking and concerns over the meeting of IMF in Washington. Low physical off-take in India, owing to high prices, also weighed on prices.

Comex April gold futures moved in line with our expectations. As mentioned in the previous update, one needs to watch the sustenance of the pullback and the ability to surpass $925-930 levels in the near-term to add hopes for the bullish trend to cont inue. Though prices crossed this mark, we saw a strong pullback subsequently. Supports are now at $914 followed by $905. Unexpected break below $905 could dent our bullish expectations and result in a sideways move or a corrective fall once again towards recent lows. However, we favour support levels to hold for a rally towards $960 levels now. We believe that the third wave could have ended at $732 and the fourth wave consolidation at $665, and the fifth wave in progress. There are now signs that the fifth wave could have ended.

A possible A-B-C correction is in the offing. The RSI is in the neutral zone, indicating a negative divergence — a sign of possible intermediate top. The averages in MACD are still above the zero line of the indicator, suggesting bullishness to be intact. Only a crossover below the zero line will indicate bearishness. Therefore, expect gold futures to consolidate and test the resistance levels.

Supports are at $903, 892 & 885. Resistances are at $925, 936 & 948.

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

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