Comex gold futures were higher on Thursday as traders weighed signs of optimism over the US economy against news that the RBI has eased restrictions on gold imports.
Gold fell on Wednesday after minutes from the US Federal Reserve’s April meeting reinforced the central bank’s outlook for a gradually improving economy.
Fed officials spent a considerable amount of time discussing how to manage interest rates when they eventually start to raise credit costs.
Comex gold futures continue to be volatile with no clear direction so far.
Resistances will be seen strongly around $1,310-15 levels again.
Mildly positive indications prevailing in the charts hints at a possible short-term upside again till $1,330/33 levels.
Cross above $1,333 could revive bullish hopes for a test of $1,355 or even higher in the coming sessions.
Once again strong support was seen in the $1,275-85 range. However, a decline below $1,270-72 levels, could further accelerate the fall towards $1,245 or even lower to $1,225.
Favoured view expects a test of resistances at $1,330 or even higher while support at $1,277/80 holds. We will now go with the alternative wave counts that we have considered broadly in our earlier updates.
From the peak of $1,920 a corrective decline in the form of “A-B-C” is already over at $1,181 and a new impulse has begun. Confirmation of such an impulse will be seen above $1,445.
Fall below $1,250 could force us to abandon this scenario and look at a bearish one targeting $1,095.
We will now wait for a confirmation for a fall below $1,250.
RSI is in the neutral zone now indicating that it is neither oversold nor overbought. The averages in MACD are below the zero line of the indicator hinting at a bearish reversal.
Only a cross over above the zero line could hint at a bullish reversal again.
Therefore, look to buy gold in the $1,287-90 zone with a stop loss at $1,277 targeting $1,330 followed by $1,355.
Supports are at $1,285, 1,270 and 1,225. Resistances are at $1,315, 1,330 and 1,355.