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Comex gold futures were down on Thursday on a strong dollar after Federal Reserve Chair Janet Yellen advocated lifting US interest rates gradually.
As mentioned in the previous update, scope for further rise to $1,215-20 also looks likely now, but we still expect prices to edge lower again. Prices found strong resistance in the $1,215-20 zone and declined from there. Near-term supports are at $1,185 followed by $1,170 levels. As cautioned earlier, though the upside correction from the lows of $1,127 has extended beyond $1,200 unexpectedly and continues to show strength in the near-term, we still view the current up move as a corrective one within a larger downtrend. Only a daily close above $1,220, could again revive bullish hopes and such a rise will hint that the downward correction has ended. Favoured view expects above mentioned supports to hold for a bullish price revival once again. 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. .
We will take a look at the wave counts and understand possible scenarios. It is most likely that the fall from the all-time highs at $1,925 to the recent low of $1,088 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. 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. The averages in MACD have gone above the zero line of the indicator again, indicating a bullish reversal.
Therefore, Sell Comex gold around $1,210-15 with stop loss at $1,223 targeting $1,170 followed by $1,145. Supports are at $1,185; $1,170; $ 1,145 and Resistances are at $1,220; 1,245; 1,260.
The writeris the Director of Commtrendz Research. There is risk of loss in trading .
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