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Gnanasekar.T

Gold futures reached a 24-day high within trading distance of quarter-century highs from early last month, before succumbing to profit taking. COMEX gold futures rallied higher in line with our expectations. As mentioned in the previous up date, the short-term picture hints at a rise higher towards $570 levels. The move has been sharp and could correct lower in the coming sessions. Declines will now be well supported at $563 levels followed by the crucial support at $553-555 levels.

Big picture charts looks clearly bullish, with an immediate potential to test $587 levels. However, a move below $548 could damage the up trend opening the way for a test of $538-40 again. As per our recent wave counts, we believe the current third wave to have ended at $575. A corrective fourth wave move could have ended at the recent low of $537. A possible fifth wave impulse is in progress now. Close below $540 will make us to revisit the counts again.

RSI is in the neutral zone indicating that it is neither overbought nor oversold. The averages in MACD are still above the zero line of the indicator suggesting bullishness to be intact. Only a cross-over of the averages below the zero line will signal bearishness again. Prices are above the short-term 8 period EMA at $563 followed by the 34 period EMA at $554. Therefore, look for COMEX gold futures to test the support levels in the coming sessions and rise higher again.

Supports are at $563, $560.5 and $555. Resistances are at $573, $577 and $585.

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