Comex gold futures rose on Thursday more than one percent as the dollar remained under pressure after minutes from the Federal Reserve’s last policy meeting showed caution over future US interest rates increases.

Comex gold futures moved higher in line with our expectations. As mentioned in the previous update, there was a possibility of prices finding support below $1,200/ounce and trying to edge higher again. Prices came close to $1,208 and then moved higher as expected.

As cautioned earlier, since the big picture continues to display neutral to bullish tendencies, we are hopeful that important supports could hold for a push higher again. While supports at $1,200 followed by $1,190 holds attempts to decline, the chances for a break above $1,300 levels still look good.

Good resistance will be seen near $1,245 followed by 1,265-70 levels now. Favoured view in the short-term expects prices to find supports on any dips to support levels around $1,200-1,210 and then move higher again.

Only a direct fall below $1,185 could dash our bullish hopes, which could see prices falling further towards $1,135 levels, which is not our favoured view.

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, 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 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.

As prices have broken certain important resistances and shows impulsive tendencies, we will now stick with the above count. And as mentioned earlier, once prices reach $1,025-45 levels we will look for any signs of reversal. There are signs of a turnaround, and prices need to convincingly rise above $1,300 levels and close above it.

RSI is in the neutral zone now indicating that it is neither overbought nor oversold. The averages in MACD are still 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 bearish.

Therefore, buy Comex gold on dips to $1,225 with a stop-loss of $1,200 targeting $1,265 followed by $1,285.

Supports are at $1,220, 1,195 and 1,165. Resistances are at $1,245, 1,275 and 1,320.

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

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