Comex gold futures were lower on Thursday, after the Federal Reserve decided to continue trimming its bond-buying programme by $10 billion a month. The Fed looked past a dismal reading on first-quarter US growth and gave a mostly upbeat assessment of the economy’s prospects. The US central bank also said economic growth is back on track after stalling during the winter. Investors cut back their holdings of the haven asset amid indications that the US economy was recovering. Many investors bought gold in the wake of the recent crisis in Russia on expectations that it would keep its value better than other assets. But as the global economic picture improves and the Fed continues to trim its bond-buying programme, demand for protective investments such as gold has been fading.
Comex gold futures fell lower as expected. Gold futures have been quite volatile with the overall bias still weak. As mentioned in the previous update, initial target is at $1,245/ounce followed by $1,220 levels. Resistances will be seen strongly around $1,310-15 levels. And while this level remains undisturbed, a down move to above mentioned levels looks likely. Minor support is at $1,275 levels. Once below $1,272, prices could fall further towards $1,245 and $1,225. Only a move above $1,332 could cause doubts over our bearish view.
The wave counts have been modified once again. 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, immediately, one can look to sell gold in the $1,290-95 with a stop loss at $1,311 targeting $1,245 followed by $1,225.
Supports are at $1,275, 1,245 and 1,200. Resistances are at $1,298, 1,310 and 1,333.
(The author is the Director of Commtrendz Researchalso in the advisory panel of Commodity exchanges and corporate houses. The author is not liable for any loss or damage, including without limitations, any profit or loss which may arise directly or indirectly from the use of above information)