Comex gold futures edged up on Thursday, as uncertainty over the outcome of the US election upheld the safe-haven demand for bullion and weakened the dollar, offsetting signals from the Federal Reserve that it could hike interest rates next month.

Comex gold futures are moving in line with our expectations. As we have been maintaining, we are still hopeful of a recovery from towards $1,295-1,300 an ounce levels in the coming sessions.

As mentioned earlier, since prices have broken the key support around $1,295-1,305 range, this will tend to cap any upside attempts again. Prices are hovering around this zone now, and the ease with which it has broken the resistances in good volumes makes believe that there further scope for a push higher towards $1,325-28, being a strong resistance zone. Only a fall again below $1,267 could revive bearish hopes for $1,208-10 levels subsequently.

Favoured view now expects prices to test resistance around the $1,320-25 levels zone while supports around $1,285 levels holds for the week, but subsequently, we either expect prices to edge lower again from there again, or a broad consolidation before push higher again. Daily close above $1,330 in good volumes could revive bullish hopes and such a rise will hint that the downward correction has ended and the rally higher above $1,400 levels has begun.

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 $1,025-30 levels or a complete correction of A-B-C ending with this decline. Subsequent 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. As prices have broken certain important resistances and shows impulsive tendencies, we will now stick with the above count. And as mentioned earlier, once prices reach $1,025-45 levels we will look for any signs of reversal. There are signs of a turnaround, and prices convincingly risen in volumes and closed above $1,300 levels, which further reaffirms our wave count.

RSI is in the neutral zone now indicating that it is neither oversold nor overbought. The averages in MACD are still below the zero line of the indicator again, indicating a bearish reversal. Only a cross over again above the zero line could hint at a reversal in trend to bullish.

Therefore, buy Comex gold on dips to $1,285 with stop-loss at $1,267 targeting $1,320.

Supports are at $1,285, 1,255 and $1,210. Resistances are at $1,320, 1,353 and 1,375.

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

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