Comex gold futures were higher on Thursday with the safe-haven appeal intact as equities and oil gave up early gains, while the US dollar came under pressure.

As mentioned in the previous update, the technical picture is turning friendly while other assets are taking a sharp beating.

A possible trend reversal is in the making, as prices have crossed certain important levels. But the medium-term picture still looks mixed.

In the short-term though, it is still likely that prices will consolidate in the range $1,085-1,105 before pushing higher towards $1,120, followed by an important resistance at $1,140-1,145 levels, being a strong falling trend line resistance level. It is most likely that the fall from the all-time highs at $1,925 to the recent low of $1,088 so far, was either a possible corrective wave “A”, with a possibility to extend towards $1,025-1,030 levels or a complete correction of A-B-C ending with this decline.

Subsequently, 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. As prices have broken the key $1,140, we will now abandon this count. And as mentioned earlier, once prices reach $1,025-1,045 levels we will look for any signs of reversal.

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

Therefore, buy Comex gold near $1,085-1,089; stop loss $1,070 targeting $1,120, followed by $1,140.

Supports are at $1,080 $1,067 & $1,045; Resistances are at $1105, 1120 & 1145.

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

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