Comex gold futures, are moving in a Thursday, as the metal struggled to find direction in thin pre-holiday trade amid conflicting cues from the currency, equities and energy markets. Comex gold futures are moving in line with our expectations. As mentioned in the previous update, the consolidation still continues and our favoured view still continues to expect a move higher. However, unexpected decline below $1,040 could diminish our bullish hopes and revive bearish expectations for a test of $1,020 or even lower. While supports around $1,055-60 holds, we favour prices to edge higher towards resistances around $1,095-97 followed by $1,120 levels. However, below $1,045, more weakness is expected towards $1,020 or even lower to $975. As mentioned in the previous update, chances of a reversal are also quite high too and a trigger for such a move would be a close above $1,090. But, now, it still looks like such short-term rallies could be short-lived and a clear reversal is still some way ahead. We favour supports to hold and prices to push higher initially breaking key resistances, after which we will be able to take a more clear directional call on gold futures. But, our favoured view expects prices to edge higher from here.
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 $1,255 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. As prices have broken the key $1,140, we will now abandon this count. And as mentioned earlier, in the short-term though, prices are likely to be under pressure and could edge lower towards $1,025-45 levels. Once prices reach these levels mentioned above or any signs of a reversal, we can take a fresh directional call. But, so far there are no such signals. RSI is in the neutral zone now indicating 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 cross over again above the zero line could hint at a reversal in trend to bullish.
Therefore, Buy Comex gold near $1,060-65 stop loss $1,045 targeting $1,090 followed by $1,105 .
Supports are at $1,045 $ 1,020 & $ 985 and Resistances are at $1,090, 1,105 & 1,120.
The writer is the Director of Commtrendz Research.There is risk of loss in trading.