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Comex gold futures ended marginally higher as there were deeper concerns over the US economic outlook going forward. The precious metal found support above $931 after falling on Thursday, when weaker-than-expected US non-farm payroll data sent investors piling into the relative safety of the dollar and gold.

Dollar is expected to be under pressure in the coming months as China ups the ante about currency reserve diversification and dollar as a stable reserve currency, a factor very supportive for gold. While investment interest in gold appeared to be stable, physical demand was lagging. Comex gold futures are moving in a tight range with a mild bullish bias now. Last week’s price action was positive. Immediate support is at $925 followed by important support at $922 now. As mentioned earlier, as long as $913-15 remains undisturbed, prices could gradually edge higher towards $957 or even higher in the coming sessions. This is our favoured view. However, unexpected fall below $913 could cause doubts on our bullish view. And such a fall has the potential to test recent lows at $865, which we do not favour. Elliot wave analysis indicates a possible fifth wave move in progress. This will be confirmed on a rally above $978. A decline below $900 could force us to abandon this count and re look at a fresh one. RSI is in the oversold zone indicating a pullback higher in the coming week. The averages in MACD are still above the zero line of the indicator indicating the bullish trend to be intact. Therefore, look for gold futures to consolidate and then rise higher subsequently.

Supports are at $923 , $915 & $ 895. Resistances are at $947, $958 $ 965.

Gnanasekaar .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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