Agri Business

Buy Comex gold if it touches $,1310/oz

Gnanasekaar T | Updated on February 22, 2018 Published on February 22, 2018

Comex gold futures on Thursday, as the dollar was bolstered by minutes of the last US Federal Reserve meeting that showed policymakers backed further interest rate hikes.

Comex gold futures are edging lower, but still showing some resilience. As mentioned in the previous update, prices could now consolidate in the $1,300-$1,320before edging higher again. There was no follow-through above $1,360, which makes us believe there could be a round of consolidation in the $1,305-1,355 zone for a while. In the near-term upticks could be capped in the $1,335-45 zone and edge lower towards initial support at $1,315. And failure to hold here could take it down to $1,300-05 from where a strong recovery is expected. As we have been maintaining for a while, the medium-term picture still holds some promise, therefore caution should be exercised on getting excessively bearish too. From the bottom at $1,045 in December 2015, prices have been making higher highs so far in 2017, a clear sign of a rising trend, which has made us believe the bigger picture to be supportive despite strong corrective declines from time to time. A positive trigger for a sustaining up trend is likely to be above a close of $1,375. In the coming week we expect $1,305-10 to hold for a push higher towards $1,355 or even higher to $1,375 levels subsequently.

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. Subsequently, 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. But, failure to follow-through above $1,355 has dashed any hopes of any impulsive up move. As prices have broken certain important supports and shows weakness targeting $1,100 . But, a sustained move above $1,200 has once again revived bullish hopes and will make the necessary adjustments to the wave counts, as the prices break key resistance above. RSI is in the neutral zone now indicating that it is neither overbought nor oversold. The averages in MACD are above the zero line of the indicator again, indicating a bullish reversal. Only a cross over again below the zero line could hint at a reversal in trend to bearish.

Therefore, Buy Comex gold on dips around $,1310 with stop loss at $1,297 targeting $1,345 followed by $1,374.

Supports are at $1,315, $1,305 & $ 1,295 and Resistances are at $1,335, 1,351 & 1,374.

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

Published on February 22, 2018
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