Date:20/03/2006 URL: http://www.thehindubusinessline.com/2006/03/20/stories/2006032000070700.htm

Back COMEX gold may consolidate

Gnanasekar T.

Gold futures ended lower after rising for four sessions helped by dollar weakness and support from rising silver prices, which hit 22-year highs. COMEX gold futures pulled back higher in line with our expectations. As mentioned in the previous up date, the short-term picture hinted at a corrective pullback to at least $551-53 levels and only a daily close above $561 will signal the resumption of bullish trend. Resistance is quite strong now between $558-560 levels. Declines will be well supported at $545-48 levels, and an unexpected break below $543 will hint at a fall to $528-30 levels. As per our recent wave counts, we believe the current third wave to have ended at $575. A corrective fourth wave could still be in progress. A possible fifth wave impulse is expected to begin after the completion of this corrective sequence.

RSI is in the neutral zone indicating that it is neither overbought nor oversold. The averages in MACD have gone below the zero line of the indicator suggesting bearishness. Only a cross-over of the averages above the zero line will signal a bullish reversal again. Prices are above the short-term 8-day period EMA at $553.45, indicating short-term bullishness followed by the 34-day period EMA at $553. Therefore, look for COMEX gold futures consolidate and test the support levels. Supports are at 548 543 and 535. Resistances are at 558, 561 and 568.