Comex gold futures were lower on Thursday as the dollar rose following strong US housing data that stoked expectations of the Federal Reserve raising interest rates soon. Gold purchases in India started slowly on Tuesday, a festival day, despite a fall in local prices, as hard times in rural areas have hit demand and many buyers are holding back because they expect prices to fall even further.

Comex gold futures are moving in a broad range. As mentioned earlier, mild bullish indication in prices, hints at a possible move towards near-term resistance around $1,225/ounce levels. Only a successful attempt to close above $1,225 with good volumes could take prices further higher towards important resistance levels near $1,245. Very strong support is seen near $1,175-80 levels. A decline below $1,170 could revive bearish expectations again. Such a move could take prices lower again towards $1,141 or even lower to $1,100. Though the short-term charts are still looking neutral to bullish, the big picture still does not hold any major promise for a rally higher. Favoured view now expects prices to get supported for a push higher towards near-term resistances. However, any unexpected fall below $1,170 should warn of a decline, and abandon any existing long trades.

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 all-time 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 have gone above the zero line of the indicator, indicating a possible bullish reversal in trend. Only a cross over again below the zero line could hint at a bearish reversal.

Therefore, buy Comex gold on dips to $1,180-85 with a stop-loss of $1,170 targeting $1,225 initially followed by $1,245.

Supports are at $1,185, 1,170 and 1,145. Resistances are at $1,225, 1,245 and 1,275.

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

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