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Comex gold futures fell on Thursday, but prices are expected to continue to rebound in coming weeks.
The medium-term picture still holds some promise, therefore caution should be exercised on getting excessively bearish. From the bottom at $1,045 in December 2015, prices have been making rising so far in 2017.
A positive trigger for the medium-term in sustaining the uptrend is likely to be above a close of $1,275 . In the short-term, we expect prices to be in the $1,145-1,275 range or even extend to $1,120-25 where good supports can be seen again. Only a close above $1,275 in the bigger picture could revive bullish hopes for $1,335 or even higher.
In the coming sessions, crucial support will come into play around $1,190-95 and we expect prices to stabilise and move higher from there towards $1,225, or even higher to $1,235. Only a fall below $1,180 could force us to abandon our mildly bullish view.
Wave counts
We will take a look at the wave counts now and understand the possible scenarios that can unfold going forward. It is most likely that the fall from the all-time highs at $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.
The alternative view
Alternatively, we can also expect wave B to extend to $1,476. 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.
An eventual break above $1,355 could see the Wave B scenario emerge in the coming sessions. While $1,270 holds, we still favour prices rising higher towards $1,450-75 in the form of wave B. We will reasses around $1,450-70on the potential for a wave C decline subsequently.
RSI is in the neutral zone hinting that it is neither overbought nor oversold. The averages in MACD are still below the zero line of the indicator again, indicating bearishness to be intact. Only a crossover again above the zero line could hint at a bearish reversal in trend.
Therefore, buy Comex gold around $1,190-95 with a stop-loss at $1,180 targeting $1,225, followed by $1,235.
Supports are at $1,195, $1,175 and $ 1,145 and resistances are at $1,225, 1,234 and 1,255.
The author is the Director of Commtrendz Research There is risk of loss in trading.
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