Comex gold futures scaled one-week high on Thursday as the dollar weakened after the US Federal Reserve kept interest rates unchanged at its first meeting since President Donald Trump took office. Gold is slightly being bid in the short-term, as the dollar’s weakness continues on the back of geo-political tensions in Iran, President Trump’s unpopular policies.
Comex gold futures moved as per expectations. As mentioned earlier, prices have found strong resistance in the $1,215-20 an ounce zone and declined towards near-term supports in the $1,185-1,170 range. A subsequent pullback from the $1,180 lows and taking out the near-term highs at $1,220 has increased the chances of this price rally to extend to the next resistance at $1,235-40 zone.
As cautioned earlier, a daily close above $1,225, could again revive bullish hopes and such a rise will hint that the downward correction has ended, and one should be ready to abandon the bearish view if prices close above $1,225 levels. Favoured view now expects support in the $1,210-15 zone to support dips if any. Though the $1,240-45 zone is a strong one to cross in the near-term, chances exist for an extension even to $1,275 eventually. 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. Only an unexpected fall below $1,190 could hint at weakness once again.
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 cross over again below the zero line could hint at a reversal in trend to bullish.
Therefore, buy Comex gold around $1,210-15 with stop-loss at $1,190 targeting $1,240 followed by $1,270.
Supports are at $1,210, 1,185 and 1,145. Resistances are at $1,245, 1,260 and 1,277.
The writer is the Director of Commtrendz Research. There is risk of loss in trading.