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Gnanasekar T.

Gold futures ended higher on Friday, but reversed early gains on weekend profit taking despite the dollar sinking to its lowest level against the euro and crude prices rising near recent highs.

The dollar slid to its lowest level in months against most major currencies after weak US economic data reinforced expectations the Federal Reserve would cut benchmark interest rates next year. News of ECB gold sales was however seen capping the upside for gold.

COMEX gold futures rose higher on expected lines. Dips, to $645-46 levels to offer good support now.

Important near-term resistance is at $658 followed by the next important resistance at $665 levels. Another round of consolidation can be expected in the $645 range before the next resistance at $665 can be tested.

And only a close below $635 will hint at a premature end to the current rally correcting further lower.

"We believe that the third wave could have ended at $732 and the corrective fourth wave still in motion. Break above $678 will signal the beginning of the fifth wave move."

RSI is in the neutral zone indicating that it is neither overbought nor oversold.

The averages in MACD are above the zero line of the indicator suggesting a bullish reversal.

Only a crossover of the averages below the zero line will signal bearishness again.

Prices are below the short-term 8-day period EMA at $640 followed by the 34-day period EMA at $623.

Therefore, look for COMEX gold to consolidate and rise higher again.

Supports are at $6,45, 638 and 633. Resistances are at $6,55, 658 and 667.

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