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Comex gold futures were slightly lower on Thursday as poor economic data from the euro zone and a standstill in the US economy’s retail sector showed that it was still struggling as improvements in the labour market failed to invoke higher spending. This eased some investor fears that the Federal Reserve will raise interest rates sooner than expected. With tensions simmering around the globe, gold should remain supported, but a general absence of investment demand or flight to safety is keeping prices range bound at present. Comex gold futures are moving, according to our expectations. As mentioned in the previous update, it looks like gold could get good support around $1,293-95 levels and prices could edge higher again. Gold futures are moving in a broad range now possibly building itself for an up move. The lower end of the band around $1,302-05 continues to be supportive. With indicators turning friendly, we favour a break on the upside above $1,325 moving higher towards $1,333 or towards the next important resistance at $1,348-50 levels. However, a daily close below $1,293 could dash our bullish hopes. Such a decline could see prices targeting $1,265 or even lower again, which we do not favour currently.
We will now go with the alternative wave counts that we have considered broadly in our earlier updates. From the peak of $1,920 a corrective decline in the form of “A-B-C” is already over at $1,181 and a new impulse has begun. Confirmation of such an impulse will be seen above $1,445. Fall below $1,250 could now force us to abandon this scenario and look at a bearish one targeting $1,095. 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 hinting at a bullish reversal. Only a cross over again below the zero line could hint at a bearish reversal again.
Therefore, look to buy gold on dips to $1,304-05 zone with a stop loss at $1,292 targeting $1,332 and 1,348.
Supports are at $1,305, 1,285 and 1,265. Resistances are at $1,325, 1,333 and 1,348.
(The author is the Director of Commtrendz Research. There is a risk of loss in trading.)
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