Comex gold futures steadied on Thursday near the one-week high hit the previous session, supported by the tension between Britain and Russia, while a modest bounce in the dollar capped gains.

Comex gold futures are moving perfectly in line with our expectations. As mentioned in the previous update, prices could bounce back from the $1,300-$1,305 an ounce levels. As expected prices are finding support and consolidating in a range between $1,300/10 and $1,335/45 . In the near-term, upticks could be capped in the $1,340-45 zone and a close above here could trigger sharper upmove towards $1,374 or even higher subsequently. But, failure to hold around $1,300-05 could take it down to $1,278-80 from where a stronger recovery is expected.

A positive trigger for a sustaining up trend is likely to be above a close of $1,375. In the coming week, we expect $1,305-10 to hold for a push higher towards $1,345 or even higher to $1,374 levels 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 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. But, failure to follow-through above $1,355 has dashed any hopes of any impulsive up move. As prices have broken certain important supports and shows weakness targeting $1,100 . But, a sustained move above $1,200 has once again revived bullish hopes and will make the necessary adjustments to the wave counts, as the prices break key resistance above.

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, but we will still await a proper confirmation to get bearish. Only a cross over again above the zero line could hint at a bullish reversal in trend.

Therefore, buy Comex gold on dips around $1,305-10 with the stop-loss at $1,297 targeting $1,345 followed by $1,374.

Supports are at $1,310, 1,295 and 1,278. Resistances are at $1,345, 1,374 and 1,395.

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

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