TECHNICAL ANALYSIS. Sell gold at $1,267/ounce

Comex gold futures hit a week-high on Thursday, as the dollar was on the defensive after tumbling in the previous session following the US Federal Reserve’s decision on interest rates.

Comex gold futures moved lower as expected. A good bounce looks likely to $1,267-75 per ounce range in the coming sessions. But it looks unlikely if prices can sustain and push higher from there. Prices could edge up to $1,260-67 , but could start declining below $1,230 again.

Only a close above $1,280 could suddenly open the upside again to $1,295/97 . A direct fall below $1,235 could revive bearish expectations for $1,206/10 in the coming sessions.

Wave counts: It is most likely that the fall from the record $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 levels or a complete correction of A-B-C ending with this decline. Subsequently, 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 $1,100 .

Therefore, sell Comex gold around $1,267 with the stop-loss at $1,278 targeting $1,235 followed by $1,210. Supports are at $1,245, 1,225 and 1,206. Resistances are at $1,267, 1,277 and 1,297.

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