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Comex gold futures were higher on Thursday as escalating tensions in West Asia knocked stocks and the dollar and drove investors to seek safety in haven assets, like bullion.
Comex gold futures moved higher in line with our expectations. As mentioned earlier, further upside looks likely towards $1,187-90 an ounce levels. Strong supports are seen at $1,175-85 levels now. Any attempts to dip lower could find strong support in the above mentioned zone for a push higher towards initial resistance at $1,223-25 levels. A successful attempt to close above $1,225 could take prices further higher towards important resistance levels near $1,245. Move above $1,255 could take prices higher once again towards $1,300-10 levels. Only a decline below $1,175 could revive bearish expectations again. Such a move could take prices lower again towards $1,141 or even lower to $1,100. Favoured view expects prices to hold support at above-mentioned levels and then attempt to test the near-term targets.
The wave counts need to be altered as prices move, but the overall trend looks weak. So, for now, we will stick to our previous assessment. It is most likely that the fall from the record high at $1,925 to the recent low of $1,130 was either a corrective wave “A” and a wave “B” is in progress with targets near $1,435 or even higher. It is also possible that the entire corrective A-B-C got over and a new impulse is in progress targeting $1,527-30 or even higher in the medium-term. If prices do cross -over above $1,435, then we can settle for the latter.
RSI is in the neutral zone now indicating that it is neither overbought nor oversold. The averages in MACD are still below the zero line of the indicator, indicating bearishness to be intact. Only a cross over again above the zero line could hint at a bullish reversal.
Therefore, buy Comex gold on dips to $1,190-95 with a stop-loss of $1,175 targeting $1,225 initially followed by $1,245.
Supports are at $1,195, 1,175 and 1,150. Resistances are at $1,225, 1,245 and 1,285.
The writer is the Director of Commtrendz Research. There is risk of loss in trading.
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