Comex gold futures are lower on Thursday on profit-booking as the dollar gained, while investment demand and physical demand underpinned prices.
Expectations that US Federal Reserve would maintain the pace of a withdrawal of monetary stimulus may diminish gold’s investment appeal as a hedge against inflation.
Gold has cleared many sentimental resistances in the short-term, but the swiftness in the recent up move makes it vulnerable for sharp bouts of profit-taking.
Comex gold futures moved perfectly in line with our expectations. As mentioned in the previous update, prices could hold support and push higher towards $1,310 followed by $1,335 levels. Price structures are favouring a move up once again. Supports are seen in the $1,300-05 range. Favoured view expects prices to edge higher towards $1,360-65 in the coming sessions. Only a fall below $1,277 could hint at weakness and postponement of our bullish view.
Direct rise above $1,335 could hint at resumption in uptrend. Chances exist for the move to extend even higher towards $1,395 levels. However, we believe resistances to be quite strong at $1,360-65 levels.
The wave counts stands unchanged so far, but could be reviewed once prices cross $1,365 levels. A failed fifth wave move at $1,800 resulted in a corrective decline to $1,181 in the form of wave “A”. A possible wave “B” is in progress with targets near $1,420 or even higher to $1,485. This means a wave “C” is expected to follow through which could target $1,150 or even lower.
Alternatively, 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 at $1,535. With the present move failing near $1,435-40, we will go with wave “B” ending at $1,433 and a possible Wave “C” underway with targets near $1,125-45 or even lower to $1,045.
RSI is in the neutral zone now indicating that it is neither oversold nor overbought. The averages in MACD are above the zero line of the indicator hinting at a bullish reversal.
Therefore, one can look to buy gold on dips again to $1,300-05 with a stop loss at $1,277 targeting $1,355 initially followed by $1,365 subsequently.
Supports are at $1,300, 1,277 and 1,254. Resistances are at $1,336, 1,355 and 1,365.
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.