Comex gold futures moved higher on Thursday as the dollar weakened and a rally in silver underpinned sentiment. Comex gold futures moved perfectly higher in line with out expectations.

As mentioned in the previous update, since the big picture continues to display neutral to bullish tendencies, we are hopeful that important supports could hold for a push again. And, while supports holds attempts to decline, the chances for a break above $1,300 per ounce levels still look good.

Prices are once again close to near-term resistance at $1,260-65 levels. A close above here could be the trigger for a move above $1,300. As cautioned earlier, the technical picture seems to be mixed and prices are expected to move in a broad range of $1,210- 65.

However, unexpected fall below $1,227 could hint at a possible head-and-shoulder pattern break that could hint at bearishness ahead. Such a move could push prices lower towards $1,160-65 levels, which we do not favour presently.

Favoured view in the short-term still expects prices to find supports on any dips to around $1,240-45 and then move higher again. Only a direct fall below $1,225 could dash our bullish hopes.

Wave counts: It is most likely that the fall from 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 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 $1,240-45 with a stop-loss of $1,226 targeting $1,285 followed by $1,310.

Supports are at $1,245, 1,225 and 1,195 and Resistances are at $1,265, 1,285 and 1,310.

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

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