Comex gold futures edged down on Thursday as upbeat US jobs data lifted the dollar, while European stocks edged higher anticipating an interest rate cut from the Bank of England.

Comex gold futures moved perfectly in line with our expectations. As mentioned earlier, any corrective dips could find support and edge higher again.

The big picture has clearly signalled a reversal in trend to the bullishness before it was languishing in the $1,200 per ounce range. A potential target lies around the $1,450-55 level, being an equality target.

As expected, we saw prices testing supports in the $1,330 range, and rising higher from there. Some minor signs of exhaustion are noted, which could see a potential correction lower towards $1,335-40 levels, being a rising trend line support zone.

Initial resistance is seen at the $1,365-75 level now. Once above, prices could push higher towards $1,400 levels or even higher in the coming sessions.

Only an unexpected fall below $1,325 could postpone the bullishness and such a fall could see prices testing $1,275 levels, but it could once again find good support there.

The favoured view still expects prices to be find support around the $1,335-40 level and then edge higher towards important resistances around $1,400 followed by the $1,435-50 level.

Wave counts: It is most likely that the fall from the record $1,925 to the recent low of $1,088 so far, was either a possible corrective wave “A”, with a possibility to even extend towards $1,025-30 levels or a complete correction of A-B-C ending with this decline.

Subsequent to this decline, a corrective wave “B” could unfold with targets near $1,375 or even higher. After that, a wave “C” could begin lower again.

Alternatively, we can also expect wave “B” to extend to $1,476 levels. If the current decline as a whole from $1,920 can be considered as a fourth wave, then the fifth wave could begin and cross $1,700 in the long-term.

As prices have broken certain important resistances and shows impulsive tendencies, we will now stick with the above count. As mentioned earlier, once prices reach $1,025-45 we will look for any signs of reversal.

There are signs of a turnaround, and prices have convincingly risen in volumes and closed above $1,300 levels, which further reaffirms our wave count. RSI is in the neutral zone now, indicating a possible downside correction in the offing.

The averages in MACD are 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 to bearishness.

Therefore, buy Comex gold on dips to $1,335-40, with a stop-loss at $1,321, targeting $1,400 followed by 1,435.

Supports are at $1,345, 1,310 and 1,270. Resistances are at $1,375, 1,398 and 1,435.

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

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