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Gnanasekar. T

Gold futures settled lower on Friday in holiday-shortened trade after the dollar recovered briefly on better-than-expected payroll numbers. Commodity markets are nervous about Iran's nuclear stand-off with the West. Any long lasting solution looks highly unlikely, which will keep gold and oil prices underpinned as investors turn to gold during uncertain times. Silver has outperformed gold rising 33 per cent, whereas gold climbed only 12 per cent in the same period. Physical consumption of gold still remains a worry, however investment demand is more than compensating for that presently.

COMEX gold futures are still trapped in a range. Immediate resistance is at $645-47 levels.

Prices have found good buying support near the $615-620 levels and now seem to be working its way towards $648-650. A bullish triangle pattern is seen presently and a break above the trend line resistance at $652 can take prices above $660 levels once again. In the bigger picture, important trend line support lies at $575-78 levels and as long as this level is not broken, we are still hopeful of seeing new highs before the year-end. We believe that the third wave could have ended at $732 and the corrective fourth wave possibly ended at $546. Currently, we could be in a corrective move within the fifth wave. It could also become an irregular wave "B" if prices fail to go above $680 and subsequently dip below $575. RSI is in the neutral zone indicating that it is neither overbought nor oversold.

The averages in MACD are below the zero line of the indicator suggesting bearishness. Only a crossover of the averages above the zero line will signal a bullish reversal.

Prices are above the short-term 8-day period EMA at $629 indicating short-term bullishness followed by the 34-day period EMA at $633. Therefore, look for COMEX gold to test the resistance levels in the coming week.

Supports are at $621, 615 and 602. Resistances are at $645, 652 and 665.

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