Comex gold futures fell on Thursday, as uncertainty ahead of a European Central Bank policy meeting and further news on US trade tariffs kept the metal in a narrow range, though a stronger dollar pressured prices.

Comex gold futures moved perfectly as per our expectations. As mentioned in the previous update, prices could bounce back from the $1,300-1,305 an ounce levels.

As expected, prices pulled back higher towards $1,335-45. Presently, some consolidation is seen. In the near-term, upticks could be capped in the $1,340-45 and edge lower towards initial support at $1,315-20. And failure to hold here could take it down to $1,278-80 from where a stronger recovery is expected. But, this is not our favoured view.

From the bottom at $1,045 in December 2015, prices have been making higher 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 $1,310-15 to hold for a push higher towards $1,345 or even higher to $1,374 subsequently.

Wave counts: It is most likely that the fall from 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 $1,025-30 or 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 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.

RSI is in the neutral zone now indicating that it is neither overbought nor oversold. The averages in MACD are still above the zero line of the indicator again, indicating bullishness to be intact. 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 $1,310-15 with the stop-loss at $1,297 targeting $1,345 followed by $1,374.

Supports are at $1,315, 1,295 and 1,278. Resistances are at $1,345, 1,365 and 1,374.

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

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