The Hindu Business Line : Gold futures may test higher level

Gold futures corrected sharply lower, mainly due to a strengthening dollar and weakening oil prices. Short-term picture hints at a corrective pullback in the coming week, to at least $551-53 levels and only a daily close above $561 will signal the resumption of bullish trend.

However, strong resistance at $551-53 levels, could further pressure prices lower towards $520 levels being the 38.2 per cent fibonnaci retracement point as seen in the chart above.

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 are still above the zero line of the indicator suggesting bullishness to be intact. Only a crossover of the averages below the zero line will signal bearishness again.

Prices are below the short-term 8 period EMA at $552, indicating bearishness followed by the 34 period EMA at $553. Therefore, look for COMEX gold futures to pullback higher and find resistance at higher levels.

Supports are at $535, 524 and 518. Resistances are at $553, 561 and 568.

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