Comex gold futures edged up higher Thursday as the dollar eased and uncertainty prevailed over Greece's debt. Gold continues to react to uncertainties over geopolitical and macro-economic developments, but as long as the Federal Reserve remains on course for tightening, the underlying trend could still be bearish. Gold's sell-off for much of this week, despite the Greek debt crisis, suggests that markets are either expecting a positive result, or they may be discounting the country's possible exit as a net positive outcome. Developments in Ukraine are being watched as it faces bankruptcy. The International Monetary Fund has agreed with Ukraine on a new bailout deal over the next four years with help from other lenders like Europe and the US.

Comex gold futures moved against our expectations. As mentioned in the previous update, a decline below $1,230 could cause doubts on our bullish view. Such a fall could see prices testing the important support near $1,200-05 levels. Prices have so far tested $1,216 and this happens to be strong intermediate support level. The broader picture despite this recent up move towards $1,300 remains weak. Failure to sustain around $1,300 and subsequent fall below important supports raises doubts over gold's potential to rise again. A short-term recovery from recent lows look likely and a move above $1,246 could see prices testing $1,257 followed by $1,275 levels again. However, only a close above $1,286 could revive bullish hopes again. Expects prices to hold in the $1,210-15 range and a recovery towards $1,257 or even higher can be expected. In case prices find it difficult to cross the resistances at $1,257 followed by $1,275, then the decline could continue again towards $1,200 levels or even lower to $1,175.

The wave counts have to be revisited once again. As illustrated in the previous update, if prices close above $1,255 we can safely assume that the declining impulse has ended and a new corrective one has begun. It is most likely that the fall from the record highs 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 are still above the zero line of the indicator, indicating bullishness to be intact. Only a cross over again below the zero line could hint at a bearish reversal.

Therefore, look to buy Comex gold above $1,246 with stop loss $1,232 targeting $1,257 initially followed by $1,275.

Supports are at $1,220, $1,200 and $1,175 and resistances are at $1,245, 1,257 and 1,275.

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

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