Comex gold futures fell on Thursday after the United States and China signalled willingness to resolve a trade dispute through negotiations, reducing demand for bullion as a safe place to park assets.

Comex gold futures moved as expected, but did not follow-through higher denting confidence. As mentioned in the previous update, prices are finding good support and consolidating in a range between $1,300/10 and $1,335/45 an ounce zone and the consolidation could last for some more time. The lower end of the zone could once again come in for a test in the coming sessions.

Price structures, however, favour a gradual rise. Near-term upticks could be capped in the $1,350-55 zone and a close above here could trigger up move towards $1,374 or even higher. But, failure to cross the resistances is likely to lead to another round of consolidation before the resistances are taken out convincingly. A positive trigger for a sustaining up trend is likely to be above a close of $1,375.

In the coming week, we expect $1,310-15 to hold for a push higher towards $1,355 or even higher to $1,374. Unexpected fall below $1,302 could see a sharp decline to $1,278-80 , which is not our favoured view.

Wave counts: It is most likely that the fall from the record $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 $1,025-30or a complete correction of A-B-C ending with this decline. Subsequently, 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 . 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 reassess around $1,450-70on the potential for a wave “C” decline subsequently.

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 again, indicating a bearish reversal.

Buy Comex gold on dips around $1,315-20 with the stop-loss at $1,297 targeting $1,355 followed by $1,374. Supports are at $1,315, 1,295 and 1,278. Resistances are at $1,355, 1,374 and 1,395.

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

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