Comex gold futures were up early Thursday, on a weaker dollar after the US President-elect Donald Trump provided little clarity on future fiscal policies at a press briefing.

Comex gold futures continues to move against expectations. As mentioned in the previous update, prices are likely to pullback higher, but, subsequently, it is expected to decline lower again towards $1,098-1,110 per ounce levels in the short-term. Though, we expected the recovery higher to $1,185-90 levels, it has stretched even further to $1,207 so far.

Scope for further rise to $1,215-20 also looks likely now, but we still expect prices to edge lower again towards $1,145 or even lower to $1,110 an important support in the medium-term. 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.

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 initially edge higher and then decline again, but one should be ready to abandon the bearish view if prices close above $1,220 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 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 upmove.

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 $1,215-20 with stop-loss at $1,228 targeting $1,170 followed by $1,145.

Supports are at $1,185, 1,170 and 1,145. Resistances are at $1,220, 1,245 and 1,260.

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

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