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Comex gold futures fell marginally on Thursday after hitting a 3-1/2-month high the session before, pulled down as investors took profits and as the dollar firmed.
Comex gold futures moved perfectly in line with our expectations. As hinted earlier, a close above $1,283 an ounce could suddenly open the upside again.
As mentioned in the previous update, charts hint at further upside in the coming sessions towards resistances in the $1,299/1,300 followed by $1,315 levels. Prices could now consolidate in the $1,290-1,320 before edging higher towards $1,352-55 zone.
A fall below $1,290 could postpone the expected bullishness. Such a fall could see prices testing the next support at $1,280. 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.
In the coming week, we expect the $1,295 levels to hold for a push higher towards $1,335 or even higher to $1,350-55 levels.
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 a sustained move above $1,200 has once again revived bullish hopes and will make the necessary adjustments to the wave counts, as the prices break key resistance above.
RSI is in the oversold zone now indicating that a downward correction is in the offing. The averages in MACD are 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 reversal in trend to bearish.
Therefore, buy Comex gold on dips around $1,290-95 with the stop-loss at $1,280 targeting $1,335 followed by $1,352. Supports are at $1,295, 1,280 and 1,260. Resistances are at $1,335, 1,345 and 1,352.
The writer is the Director of Commtrendz Research. There is risk of loss in trading .
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