Comex gold futures ended higher Thursday on bargain-hunting after a recent sharp drop in prices. However, it was still near a four-week low as traders weighed the possibility of a sooner-than-expected hike in US interest rates. Gold was slightly boosted by fall in equities on Thursday, while the euro probed recent lows against the dollar amid speculation the US Federal Reserve was tilting towards tighter monetary policy.

Comex gold futures fell against our expectations. As mentioned in the previous update, a fall below $1,310 could force us to abandon our bullish view. Prices did come close to our targets near $1,355 before declining. Price structures are neutral presently. Fall below $1,285 could expose gold futures to further downside targeting $1,265 being a strong trendline support point. Below here, the fall could be very sharp targeting recent lows at $1,185 or even lower to $1,145 levels on the downside. However, while the $1,265 support holds, prices could still inch higher and take out the strong $1,355-65 resistance zone. Expect prices to get capped in the $1,315-25 zone and decline. Only a daily close above $1,342 could revive bullish hopes again.

The wave counts have been modified once again. 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 overbought zone now indicating a possible correction in the offing. The averages in MACD are above the zero line of the indicator hinting at a bullish reversal. Only a cross over below the zero line again could hint at bearishness again.

Therefore, look to sell gold on upticks to $1,320-25 zone with a stop loss at $1,342 targeting $1,285 followed by $1,265.

Supports are at $1,305, 1,285 and 1,265 while Resistances are at $1,345, 1,367 and 1,395.

(The author is the Director of Commtrendz Research and also in the advisory panel of Commodity exchanges and corporate houses. The author is not liable for any loss or damage, including without limitations, any profit or loss which may arise directly or indirectly from the use of above information. He can be reached at >gnanasekar.t@gmail.com .)

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