Comex gold futures were lower on Thursday as traders awaited the minutes of the last Federal Reserve meeting. Also, Chinese investors sold the precious metals to take profits on return from a week-long holiday.

Comex gold futures pulled back higher from the lows once again, but are not finding enough momentum to continue pushing higher. Prices are finding strong resistance near $1,150-55 per ounce presently and are unable to take out this important resistance, where it has failed in the recent past too.

As cautioned in the previous update, a last line of support lies at $1,107-08 from where prices could stage another modest rally higher. But, now below $1,130 the bearish momentum could build up once again threatening to dent the bullish picture. Strong support is seen at $1,120-25 range in the coming week.

While these supports hold, an eventual break above $1,155 looks likely targeting $1,168-70 levels or even higher. Unexpected decline below $1,115 could damage the bullish prospects and rekindle bearishness hopes once again.

Price structures favour an up move in the coming week and our favoured view expected prices to hold support at levels mentioned above and rise higher from there.

We will take a look at the wave counts now and understand the possible scenarios that can unfold going forward. 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 $1,255 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.

We are more inclined to go with this as a favoured scenario. If prices do cross-over above $1,435, then this possibility will be confirmed.

In the short-term though, prices are likely to be under pressure and could edge lower towards $1,025-45 levels.

RSI is in the neutral zone now indicating that it is neither oversold nor overbought. The averages in MACD are above the zero line of the indicator again, indicating bullishness to be intact. Only a cross over again below the zero line could hint at a bearish reversal.

Therefore, buy Comex gold near $1,125-30 with a stop-loss of $1,114 targeting $1,167 followed by $1,195.

Supports are at $1,135, 1,110 and 1,095 and Resistances are at $1,155, 1,168 and 1,195.

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

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