Comex gold futures were lower on Wednesday, as a rout in the base metals markets pressured the precious metal and physical buying slackened, though volatility in the equity and currency markets lent support as investors sought a haven from risk.

Gold futures hit a near 3-month high earlier this week, as turmoil in the wider financial markets sent investors scurrying for assets seen as lower risk, like the Japanese yen, US and German bonds, and bullion.

Comex gold futures moved higher as expected. As mentioned in the previous update, chart picture has turned neutral now and if the price crosses certain important resistance, there could be a bullish turnaround in the offing.

Consolidation is on the cards as prices hit a strong near-term resistance at $1,243-45 an ounce levels. Dips to $1,210-15 could supports now. Failure to sustain and follow-through higher could again indicate a sign of weakness.

Fall below $1,198 will trigger a bearish move again in gold. Such a move could take prices lower to supports at $1,154 followed by the recent low at $1131.

However, the present price structures do not indicate any major bearishness.

Strong resistance will now be seen at $1,238-40 followed by $1,255 level.

Expect prices to hold supports and gently edge higher above resistances mentioned above.

Fall below $1,250 has forced us to abandon any bullish hopes and look at a bearish one targeting $1,050. We feel the present set of moves from $1,175 to $1,435 is a corrective wave four in an impulse which began from the high of $1,920, with an equality target at $1,020.

However, there are many intermediate levels from where good retracement can be seen. The $1,035-70 could prove to be a good intermediate support. Ideally, from this area, a pullback higher towards $1,300 looks likely. If prices close above $1,255 we can safely assume that the declining impulse has ended and a new corrective one has begun.

RSI is in the neutral zone now indicating that it is neither oversold nor overbought. The averages in MACD have gone above the zero line of the indicator, indicating a possible bullish reversal now.

A crossover again below the zero line could hint at bearishness.

Therefore, look to buy Comex gold on dips to $1,210 with a stop-loss of $1,196 targeting $1,245 initially followed by $1,274.

Supports are at $1,210, 1,185 and 1,155. Resistances are at $1,245, 1,255 and 1,274.

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

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