Comex gold futures are lower Thursday, as strong U.S. economic growth boosted equities and the dollar, weakening safe-haven appeal for bullion. Data earlier this week showed the U.S. economy grew at a 5.0 percent rate in the third quarter, its quickest pace in 11 years and the strongest sign yet that growth has decisively shifted into higher gear. A strong economy could also prompt the Federal Reserve to raise interest rates soon, a factor that would hurt zero-yielding gold. Holdings of the world's top gold-backed exchange traded fund, SPDR Gold Trust, are near six-year lows, reflecting weak investment sentiment towards bullion and physical demand in top consumers India and China so far, has dipped from record levels seen last year.

Comex gold futures moved higher as expected. In the earlier update, we expected a push higher towards $1239 levels, but prices were unable to sustain above $1210 denting the bullish sentiment. Fall below $1182 has triggered a bearish move in gold. Immediate support is at $1154 followed by the recent low at $1131. Further decline to $1,100 levels also looks likely subsequently. Strong resistance will be seen at $1201 followed by $1227-28 levels now. Gold has been trying to sustain above $1200 more than a few times, but has failed. The present decline could be a stronger one, having failed to sustain at higher levels. Only an unexpected fall below $1228 could change the picture to neutral. The coming weeks could see extreme volatility, as the holiday season begins and thin volumes could exaggerate market moves.

The wave counts have to be revisited again. Fall below $1250 has forced us to abandon any bullish hopes and look at a bearish one targeting $1050. We fell the present set of moves from $1175 to $1435 is a corrective wave four in an impulse which began from the high of $1920, with a equality target at $1020. However, there are many intermediate levels from where good retracement can be seen. The $1,035-70 could prove to be a good intermediate support. Ideally, from this area, a pullback higher towards $1300 looks likely. If prices close above $1255 we can safely assume that the declining impulse has ended and a new corrective one has begun. The move to $1238 was in the form of three waves denoting a corrective move upwards within a declining impulse. RSI is in the neutral zone now indicating that it is neither oversold nor overbought. The averages in MACD are below the zero line of the indicator indicating a possible bearish reversal again. A cross over again above the zero line could hint at a bullish reversal.

Therefore, look to sell Comex gold initially on rallies to $ 1180-90 stop loss $1212 targeting $1155 initially followed by $1130.

Supports are at $1155, $ 1130 & $ 1100 and Resistances are at $1185,$1210 & 1238.

(The author is the Director of Commtrendz Research and there is risk of loss in trading. He can be reached at > gnanasekar.t@gmail.com. )

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