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Comex gold futures rallied higher on Thursday, rallying for a ninth straight session as a retreat in the dollar on the back of lower US bond yields drove gains in commodities priced in the currency. Meanwhile, holdings of the largest gold-backed exchange-traded-fund, New York’s SPDR Gold Trust, remained unchanged on Wednesday from Tuesday, while the largest silver-backed ETF, New York’s iShares Silver Trust, fell 0.25 per cent during the same period.
Comex gold futures moved against our expectations. As hinted earlier, a close above $1,283 an ounce could suddenly open the upside again to $1,295/97 . While dips to $1,270-73 holds, we can expect near-term resistance at $1,299/1,300 followed by $1,315 can be tested. Direct fall below $1,273 could revive bearish expectations for $1,258/60 , from where it is expected to edge higher again.
From the bottom at $1,045 in December 2015, prices have been making higher highs so far in 2017, a clear sign of a rising trend, which has made us believe the bigger picture to be supportive despite strong corrective declines from time to time. In the coming week, we expect the $1,280 levels to hold for a push higher towards $1,315 or even higher.
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 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. 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, buy Comex gold on dips around $1,278-80 with the stop-loss at $1,270 targeting $1,306 followed by $1,315. Supports are at $1,285, 1,273 and 1,260. Resistances are at $1,299, 1,306 and 1,335.
The writer is the Director of Commtrendz Research. There is risk of loss in trading .
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