Comex gold futures rose on Thursday supported by an improved technical outlook after scaling key milestones as the market continued to hold out against a stronger dollar.

Holdings of the SPDR Gold Trust, the largest gold-backed ETF, have gained more than 2 per cent since October 3.

Comex gold futures have moved in line with our expectations so far. The medium-term picture still holds some promise, therefore caution should be exercised on getting excessively bearish too.

From the bottom at $1,045 per ounce in December 2015, prices have been making highs so far — an indication of a rising trend. A positive trigger for the medium-term in sustaining the uptrend is likely to be above a close of $1,275 levels. In the short-term, we expect prices to be in the $1,145-1,275 range or even extend to $1,120-25.

Only a close above $1,275 in the bigger picture could revive bullish hopes for $1,335 or even higher. Prices have finally broken out on the upside reviving bullish hopes. A near-term resistance at $1,234 has stalled the upmove for now. Only a fall below $1,205 could force us to abandon our bullish view. Such a fall, though not expected, could damage the bullish picture, which is not our favoured view.

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 levels 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 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.

An eventual break above $1,355 could see the Wave “B” scenario emerge in the coming sessions. While $1,170 holds, we still favour prices rising higher towards $1,350-75 in the form of wave “B”. We will re-assess around $1,400 levels on the potential for a wave “C” decline subsequently.

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

Therefore, buy Comex gold around $1,210-15 with the stop-loss at $1,195 targeting $1,235 followed by $1,255.

Supports are at $1,210, 1,185 and 1,165. Resistances are at $1,235, 1,255 and 1,274.

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

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