Comex gold ended lower on Friday on profit-taking as the dollar rose higher denting gold's appeal. Gold

came under renewed pressure as two weeks of extreme volatility for bullion rattled some confidence

in its bull run.

Worries that the US Congress was unlikely to approve much of President Barack Obama's $447 billion plan to get jobless Americans working again added to some safe-haven buying bouncing from its lows. The Federal Reserve Chairman, Mr Ben S. Bernanke, said policy makers will discuss the tools they may need to use to aid the recovery at their meeting this month denting gold's appeal.

Comex gold futures are moving in a volatile range. As mentioned earlier, trying to pick a top in gold has been the most challenging job for a chartist over the years. A decisive top has been so elusive. Every time a top has been established, prices have broken it subsequently with further vigour which only indicates the strong underlying trend in progress. Ideally, prices could decline as it finds strong resistance in the $1,880-1,890 zone. Failure to follow through from here is taking away confidence of the bull camp. Only a daily close above $1,900 can open the upside for a push higher towards $1,950 on the upside or even higher towards the psychological $2,000 mark. Dips to $1810-1,815 could hold supports now.

Only a direct fall below $1,805 will confirm that a corrective decline has begun.

The wave counts have to be revisited again as a possible fifth could be in the making again. Potential targets for the fifth wave have already been met. Prices have gone above $1,900 as an extension of the fifth wave. As of now we feel the fifth wave move has ended.

However, a confirmation can be seen only below $1,600. Till then we stick to the continuance of the fifth wave. RSI is still in the neutral zone now indicating that it is neither overbought nor oversold.

Negative divergence here warns of a strong decline ahead. The averages in MACD are still above the zero line of the indicator hinting at bullishness to be intact.

Only a cross-over below the zero line in the indicator again will signal the resumption of bearish trend.

Therefore, look for gold futures to test the resistance levels and then fall lower again. Supports are at $1,845, $1815 and $1,785. Resistances are at $1,898, $1,920 and $1,950.

(The author is the Director of Commtrendz Research and also in the advisory panel of Multi

Commodity Exchange of India Ltd (MCX). The views expressed in this column are his own and not

that of MCX. This analysis is based on the historical price movements and there is risk of loss in

trading. He can be reached at gnanasekar_thiagarajan@yahoo.com.)

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