Comex gold futures ended lower on Thursday following uncertainty over Greece’s move after the European Central Bank said it would no longer accept Athens bonds in return for funding. China's move on Wednesday to cut the reserve requirement for banks in an effort to add more liquidity to fight off an economic slowdown and looming deflation could, however, support demand the yellow metal in the short term.

Markets will closely watch the US non-farm payrolls for more clues and that could set near-term direction for gold prices.

Comex gold futures moved in line with our expectations. As mentioned in the previous update, failure to hold support at $1,265 an ounce levels could drag prices to next important support at $1,237-40 levels again.

Currently, support is seen in the $1,250-55 range and a fall below here could take it to the next support mentioned above. Strong resistance will now be seen at $1,285-95 followed by $1,310 levels.

Price structures are still displaying neutral to bullish tendencies, which makes us wary of getting bearish even though there is weakness presently. While prices stay above $1,235 levels, chances exist for a retest of recent highs or even higher.

Only a decline below $1,230 could cause doubts on our bullish view. Such a fall could see prices testing the important support near $1,200-05 levels.

The wave counts have to be revisited once again.

As illustrated in the previous update, if prices close above $1,255 we can assume that the declining impulse has ended and a new corrective one has begun.

It is most likely that the fall from the all-time highs at $1,925 to the recent low of $1,130 was either a corrective wave “A” and a wave “B” is in progress with targets near $1,435 or even higher. It is also possible that the entire corrective A-B-C got over and a new impulse is in progress targeting $1,527-30 or even higher in the medium-term. If prices do cross -over above $1,435, then we can settle for the latter. RSI is in the neutral zone now indicating that it is neither overbought nor oversold.

The averages in MACD are gone above the zero line of the indicator, indicating a possible bullish reversal now. A cross over again below the zero line could hint at bearishness.

Therefore, look to buy Comex gold on dips to $1,240 with a stop-loss of $1,229 targeting $1,285 initially followed by $1,310.

Supports are at $1,240, 1,230 and 1,205. Resistances are at $1,285, 1,310 and 1,325.

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

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