Comments
Comex gold futures dropped on Thursday as a firm dollar and floundering Chinese yuan continued to dent the metal's appeal. The Chinese yuan hit a fresh seven-month lows against the dollar overnight, tarnishing the metal's appeal to Chinese investors. Physical demand has been weak in China and gold prices have slipped in recent sessions. Comex gold futures moved perfectly in line with our expectations. As mentioned earlier, prices could hold support and push higher towards $1,355 levels. Price structures are now showing corrective tendencies. Supports are seen in the $1,310-15 followed by $1,283-85 range. Expect prices to edge lower towards $1,280-85 in the coming sessions, while the upside remains capped at $1,345. Only a fall below $1,270 could hint at weakness and damage the bullish picture. A rise above $1,345 could lead to resumption in uptrend. Chances exist for the move to extend even higher towards $1,395 levels subsequently. However, in the coming sessions prices could potentially drop to targets mentioned above.
The wave counts stands unchanged so far, but could be reviewed once prices cross $1,365 levels. A failed fifth wave move at $1,800 resulted in a corrective decline to $1,181 in the form of wave “A”. A possible wave “B” is in progress with targets near $1,420 or even higher to $1,485. This means a wave “C” is expected to follow through which could target $1,150 or even lower. Alternatively, 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 at $1,535. With the present move failing near $1,435-40, we will go with wave “B” ending at $1,433 and a possible Wave “C” underway with targets near $1,125-45 or even lower to $1,045. RSI is in the neutral zone now indicating that it is neither oversold nor overbought. The averages in MACD are above the zero line of the indicator hinting at a bullish reversal.
Therefore, one can look to sell gold on rallies to $1,338-40 with a stop loss at $1,352 targeting $1,300 initially followed by $1,285 subsequently.Supports are at $1,305, $1,283 and $1,270 and resistances are at $1,345, $1,365 and $1,395.
The author is the Director of Commtrendz Research. There is a risk of loss in trading.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.