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Comex gold futures ruled steady on Thursday as traders remained cautious ahead of a European Central Bank meeting set to give details on its massive bond-buying programme and the release of key US non-farm payrolls numbers. As a reaffirmation of market sentiment towards investments in gold currently, SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, saw its holdings drop to a one-month low of 760.80 tonnes earlier this week, having posted a near 8-tonne fall, its biggest one-day outflow for the year so far.
Comex gold futures are languishing near the psychological $1,200/oz levels.
As mentioned earlier, failure to cross near-term resistances at $1,235/37 could revive bearish sentiment again. Though, the short-term technical picture is still supportive around $1,200 levels, the overall picture is one of weakness. . However, the weakness is likely to persist with a gradual decline to recent supports at $1,170-75 levels. Failure to hold here around $1,167-70 could reaffirm the big picture bearish view for gold. For the coming week, favoured view expects upticks to get capped in the $1,210-15 range and decline lower towards $1,175 levels or even lower, where it could take some intermediate support. Only a close above $1,227 could revive bullish hopes again. Such a move could take prices higher towards $1,245 levels again or even higher.
It is most likely that the fall from the record high at $1,925 to the recent low of $1,130 was either a corrective wave “A” and a wave “B” is in progress with targets near $1,435 or even higher. It is also possible that the entire corrective A-B-C got over and a new impulse is in progress targeting $1,527-30 or even higher in the medium-term.
If prices do cross -over above $1,435, then we can settle for the latter.
RSI is in the neutral zone now indicating that it is neither overbought nor oversold.
The averages in MACD have gone below the zero line of the indicator, indicating bearishness again. Only a cross over again above the zero line could hint at a bullish reversal.
Therefore, sell Comex gold on upticks to $1,205-10 with a stop-loss $1,228 targeting $1,175 initially followed by $1,155.
Supports are at $1,195, 1,168 and 1,155. Resistances are at $1,215, 1,228 and 1,245.
The writer is the Director of Commtrendz Research. There is risk of loss in trading.
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