Comex gold futures were up on early Thursday, supported by a softer dollar and short-covering ahead of the year-end. Gold has still risen about 8 per cent so far this year despite an 8 per cent drop in November alone.

Comex gold futures moved as per expectations. As mentioned in the previous update, there is scope for prices to extend to lower level and bearish indications dominating the big picture charts still favour a further fall.

As expected, we saw a pull back to $1,145 an ounce levels and more recoveries to $1,155-60 also looks likely now. But, subsequently, it is expected to decline towards $1,098/1,110 levels in the short-term from where a minor recovery looks likely. Such a recovery could find it difficult to cross $1,157-60 levels.

Subsequently, we expect prices to edge lower again towards $1,080 or even lower to $1,045 an important support in the medium-term. Only a daily close above $1,190 in good volumes could again revive bullish hopes and such a rise will hint that the downward correction has ended.

We still maintain our broader bullish view of gold in the long-term. And the current fall to recent lows could once again be an opportunity to do some bottom picking in 2017.

Favoured view expects prices to pullback higher and then decline lower again, but one should be ready to abandon the bearish view if prices close above $1,200 levels in good volumes.

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. 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 $975 levels, we are tilted towards looking at this as a corrective wave “C” in progress.

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 a bearish reversal. Only a cross over again above the zero line could hint at a reversal in trend to bullish.

Therefore, sell Comex gold around $1,155 with stop-loss at $1,170 targeting $1,110 followed by $1,095.

Supports are at $1,125, 1,090 and 1,045. Resistances are at $1,155, 1,170 and 1,187.

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