Comex gold futures fell on Thursday, from an earlier two-week high as the dollar recovered some ground after posting its biggest daily fall in 18 months. This followed a more cautious than expected interest rate statement from the US Federal Reserve. Gold fell to a four-month low earlier this week as concerns mounted over higher US interest rates which could dent demand for the precious metal. Comex gold futures moved lower in line with our expectations. As mentioned earlier, expect upticks to get capped in the $1,175-85 per ounce range and decline towards $1,145 levels or even lower to $1,110, where it could take some intermediate support. Prices found support in the $1,144-45 range and bounced smartly higher towards $1,175 levels so far, which happens to be the falling trend line resistance point. Further upside looks likely towards $1,187-90 levels. The next objective post could be around $1,200 levels.

In the coming week, while support around $1,145-50 hold, we can expect prices to rebound higher towards above mentioned resistances. Only a close above $1,206 can revive bullish hopes again. Such a move could take prices higher towards $1,245 levels again or even higher. Unexpected decline below $1,141 could dash our bullish hopes and the decline to $1,100 could resume, which is not our favoured view.

The wave counts need to be altered as prices move, but the overall trend looks weak and at present levels makes it difficult to take any directional call decisively. So, for now, we will stick to our previous assessment. It is most likely that the fall from the record highs at $1,925 to the recent low of $1,130 was either a corrective wave “A” and a wave “B” is in progress with targets near $1,435 or even higher. It is also possible that the entire corrective A-B-C got over and a new impulse is in progress targeting $1,527-30 or even higher in the medium-term. If prices do cross -over above $1,435, then we can settle for the latter.

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, indicating bearishness to be intact. Only a cross over again above the zero line could hint at a bullish reversal.

Therefore, buy Comex gold on dips to $1,150 with a stop-loss of $1,140 targeting $1,185 initially followed by $1,205.

Supports are at $1,145, 1,110 and 1,075. Resistances are at $1,185, 1,205 and 1,245.

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

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