Comex gold futures rose higher on Thursday after US President Donald Trump agreed to a deal with opposition Democrats to temporarily extend the US debt limit, helping to weaken the dollar. Comex gold futures are moving perfectly in line with our expectations so far. As mentioned in the previous update, we expected supports to hold and push higher again towards $1,335 or even higher to $1,374. As explained previously, in the medium-term, possibility exists for this move to extend to $1,374 , an important medium-term resistance level.

Near-term support is in the $1,325-26 zone and we expect this zone to hold supports and push higher again towards $1,355 or even higher to $1,374 in the coming sessions. A rise above $1,374 could hint at further bullishness towards $1,395-1,400. A break below $1,321 could temporarily dent the prospects of further upside. Such a move could see prices testing at $1,305-10 followed by stronger supports at $1,290-95now. Favoured view expects prices to edge higher again after testing key support levels mentioned above. It appears more likely that supports at $1,325 to hold for a push higher towards $1,355 or even higher in the coming sessions.

We will take a look at the wave counts now and understand the possible scenarios that can unfold going forward. It is most likely that the fall from the all-time highs at $1,925 to the recent low of $1,088 so far, was either a possible corrective wave ‘A’, with a possibility to even extend towards $1,025-30, or a complete correction of A-B-C ending with this decline. Subsequently, to this decline, a corrective wave ‘B’ could unfold with targets near $1,375 or even higher. After that, a wave ‘C’ could begin lower again. Alternatively, we can also expect wave ‘B’ to extend to $1,476 . If the current decline as a whole from $1,920 can be considered as a fourth wave, then the fifth wave could begin and cross $1,700 in the long-term. But failure to follow-through above $1,355 has dashed any hopes of any impulsive up move.

As prices have broken certain important supports and shows weakness targeting $975, we are tilted towards looking at this as a corrective wave ‘C’ in progress. RSI is in the overbought zone now indicating that a possible downward correction is in the offing.

The averages in MACD are above the zero line of the indicator again, indicating a bullish reversal. Only a cross over again below the zero line could hint at a reversal in trend to bullish.

Therefore, buy Comex gold on dips to $1,320-25, with stop-loss at $1,302 targeting $1,355 followed by $1,374. Supports are at $1,278, $1,1265 & $1,253 and resistances are at $1,305, 1,335 & 1,351.

The writer is the Director of Commtrendz Research. There is risk of loss in trading

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