Comex gold futures rose on Thursday, as the dollar firmed on hawkish comments from US Federal Reserve officials that stoked expectations of a US interest rate hike in March.

Comex gold futures moved perfectly in line with our expectations. Prices are finding good support around $1,220-25 levels, and it looks like this trend could continue towards $1,260-65 in the coming sessions.

Prices tested $1,261 before coming off from there. The picture looks mixed right now with chances of a consolidation in a broad range till the event risk gets over in the coming weeks.

The present firmness in prices, despite a strengthening dollar, hints at decoupling in the inverse relationship with it. The favoured view now expects support at the $1,235 level to hold dips if any. A direct fall below $1,235 could, however, see the next support at $1,220 being tested again. Only a failure to hold here could have more bearish implications.

The current fall to recent lows could once again be an opportunity to do some bottom picking in 2017. The favoured view expects prices to initially find support around the levels mentioned above. Only an unexpected fall below $1,210 could hint at weakness once again.

Wave counts: It is most likely that the fall from the all-time high 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.

Subsequent 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 . 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.

RSI is in the neutral zone now, indicating that it is neither overbought nor oversold.

The averages in MACD have gone above the zero line of the indicator again, indicating a bullish reversal. Only a crossover again below the zero line could hint at a reversal in trend.

Therefore, Buy Comex gold around $1,230-35 with a stop-loss at $1,218 targeting $1,265 followed by $1,278. Supports are at $1,235, $1,220 & $1,195 and Resistances are at $1,265, 1,278 & 1,310.

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

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