Ripples Advisory, Buy Comex gold on dips to $1,235/40/oz
Comex gold futures hit their lowest in more than six months on Thursday as the greenback held near one-year highs amid mounting US-China trade friction. Gold prices, which usually rise in times of political and economic uncertainty, have hardly benefited from the ongoing global trade tensions, while expectations that the US Federal Reserve will hike interest rates pulled down the bullion.
Comex gold futures have hit key supports and seem to be holding for now at least. As mentioned earlier, fall below $1,281 has opened the possibility of prices falling to near-term supports around $1,250-1,255 with chances of an extension even to $1,235-1,240 .. Fall below $1,278 saw prices declining further to $1,250 so far. More declines to $1,235 looks likely from where a strong rebound can be expected. The medium-term picture still holds some promise, therefore caution should be exercised on getting excessively bearish too. A positive trigger for the medium-term in sustaining the uptrend is likely to be above a close of $ 1,335. In the short-term, we expect a pullback from present levels to $1,270-1,275 or even extend to $1,281 where good resistances can be seen. Our favoured view now expects prices to edge higher initially to $1,270-75 while $1,235 holds attempts to the downside. Only a close above $1,300 could revive bullish hopes again.
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 $1,025-1,030 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 to 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. An eventual break above $1,355 could see the Wave "B" scenario emerge in the coming sessions. While $1,270 holds, we still favour prices rising higher towards $1,450-75 in the form of wave "B". We will re-asses around $1,450-70 on the potential for a wave "C" decline subsequently. RSI is in the oversold zone hinting at an upward correction in the offing before more declines can be seen.
Therefore, Buy Comex gold on dips to $1,235/40 with stop loss at $1,222 targeting $1,270-75 followed by $1,289.
Supports are at $1,235, $1,225 & $ 1,210 and Resistances are at $1,255, 1,275 & 1,290.
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