Comex gold futures were up on Thursday as the US dollar stepped further away from a 14-year peak hit earlier this week, and on a technical rebound.

Comex gold futures moved against expectations. As mentioned in the previous update, prices are likely to pull back higher, but, subsequently, it is expected to decline again towards $ 1,098-1,110 per ounce levels in the short-term.

Though, we expected the recovery at $1,155-60 levels, it has stretched even further to $1,179 so far.

Scope for further rise to $1,187-95 also looks likely now, but we still expect prices to edge lower again towards $1,110 or even lower to $1,095 an important support in the medium-term.

Only a daily close above $1,200 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 pull back 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 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.

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 has 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 bearishness to be intact.

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

Therefore, sell Comex gold around $1,185-95 with stop-loss at $1,206 targeting $1,145 followed by $1,110.

Supports are at $1,155, 1,125 and 1,095. Resistances are at $1,187, 1,205 and 1,241.

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

Related Topics