Comex gold futures rose for a second consecutive day on Thursday after Federal Reserve officials hinted that US interest rates may rise more slowly than expected, while palladium hit a new 16-year high, supported by strong industrial metals markets.

The minutes of the Fed's July 25-26 policy meeting showed some policymakers wished to halt further rate increases until it is clear that the trend of soft inflation is transitory.

Comex gold futures are moving perfectly in line with our expectations so far. We expect prices to edge towards $1,295-97, a potential target area. Momentum in the near-term looks strong and prices are on their way towards $1,295-1,300, where strong resistances kick in.

The trigger for a rise could be on a close above $1,272, which could hint at a revival in upward momentum.

Bullish trend

This level could now hold supports on the way down. The $1,253-55 resistance was a long-term resistance level and as it was taken out, a bullish trend has emerged.

Dips to $1,265-70 followed by $1,255 are seen supportive in the coming sessions. Favoured view expects prices to edge higher towards resistances mentioned above.

It looks more likely that supports at $1,270-75 to hold for a push higher towards $1,295-1,300 or even higher in the coming sessions.

RSI is in the neutral zone now indicating that it is neither overbought nor oversold. The averages in MACD have gone above the zero line of the indicator again, indicating a bullish reversal.

Only a crossover again below the zero line could hint at a reversal in trend to bullish.

Therefore, Buy Comex gold on dips to $1,270-75 with a stop loss at $1,260 targeting $1,295 followed by $1,335. Supports are at $1,277, $1,1265 and $ 1,253 and resistances are at $1,295, 1,305 & 1,335.

The writer is the Director of Commtrendz Research. There is risk of loss in trading .

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