Gnanasekar T.

Gold futures ended higher on inflationary jitters ahead of Federal Reserve meet next week and higher crude oil prices remaining supportive. Gold also drew strength from silver and from rallying copper and base metals, gaining before the weekend due to a lack of selling pressure.

The dollar tumbled after a weaker-than-expected home sales report pared back expectations for further boosting Fed rate hikes. The dollar has been rising all week, underpinned by a growing perception that the Fed will keep raising rates after an expected hike to 4.75 per cent next week.

COMEX gold futures consolidated and broke higher showing signs of a bullish move in the offing. Break of the channel at $567-68 will trigger a sharp move higher targeting $588 initially followed by $601.

As mentioned in the previous up date, only a daily close above $561 will signal the resumption of bullish trend. Resistance is quite strong now between $566-67 levels. We saw declines being well supported at $545-48 levels, and only an unexpected break below $543 will hint at bearishness and 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 crossover of the averages above the zero line will signal a bullish reversal again. Prices are above the short-term 8-day period EMA at $554, indicating short-term bullishness followed by the 34-day period EMA at $553. Therefore, look for COMEX gold futures to test the resistance levels and rise higher.

Supports are at $556, $551 and $548. Resistances are at $566, $574 and $580.

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