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.