Comex gold futures fell to a three-week low on Thursday, extending the previous day’s slide, after minutes from the Federal Reserve’s latest policy meeting signalled it could raise US rates as soon as next month.

Comex gold futures are moving against our expectations. As mentioned in the previous update, price could not sustain above $1,000/ounce denting the confidence of the bulls.

The weekly price structures still look healthy for the uptrend to gain momentum despite the sharp fall recently. While $1,25-30 holds attempts to decline, we expect prices to edge higher again above $1,300.

However, unexpected fall below $1,224 could hint could hint at bearishness ahead. Such a move could push prices lower towards $1,210-15 levels.

Favoured view in the short-term still expects prices to find supports on any dips to around $1,225-30 and then move higher again.

Only a direct fall below $1,215 could dash our bullish hopes.

Wave counts: It is most likely that the fall from the all-time highs at $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, 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.

There are signs of a turnaround, and prices need to convincingly rise above $1,300 levels and close above it. RSI is in the neutral zone now indicating that it is neither overbought nor oversold.

The averages in MACD are still 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 reversal in trend to bearish.

Therefore, sell Comex gold on rallies to $1,260-65 with a stop-loss of $1,274 targeting $1,210-15.

Supports are at $1,245, 1,215 and 1,195. Resistances are at $1,265, 1,282 and 1,325.

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

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