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Comex gold ended marginally higher on Thursday, as China poured cold water on reports that it might stop buying US debt.
Comex gold futures moved perfectly in line with our expectations. As hinted earlier, a close above $1,283 per ounce could suddenly open the upside again. Prices could now consolidate in the $1,290-1,320 levels before edging up towards $1,352-55.
Dips to $1,313 followed by $1,305 is expected to hold for an initial test of $1,335 followed by $1,352-55 .
A direct fall below $1,302 could postpone the expected bullishness. Such a fall could see prices testing the next support at $1,280.
In the coming week, we expect the $1,310-15 levels to hold for a push higher towards $1,335 or even higher to $1,350-55 levels.
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, 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.
But failure to follow-through above $1,355 has dashed any hopes of any impulsive up move.
As prices have broken certain important supports and shows weakness targeting $1,100 . But, a sustained move above $1,200 has once again revived bullish hopes and will make the necessary adjustments to the wave counts, as the prices break key resistance above.
RSI is in the neutral zone now indicating that it is neither overbought nor oversold. The averages in MACD are have gone 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 around $1,310-15 with the stop-loss at $1,293 targeting $1,335 followed by $1,352.
Supports are at $1,305, 1,289 and 1,275. Resistances are at $1,335, 1,353 and 1,374.
The writer is the Director of Commtrendz Research. There is risk of loss in trading .
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