On Thursday, Comex gold futures held below a 3-week peak hit the session before, with the dollar recovering from seven-week lows and markets waiting to see if US President Donald Trump is able to push through a healthcare bill, in the first major test of his legislative ability.

The holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose 0.50 percent to 834.40 tonnes on Tuesday from 830.25 tonnes on Monday. A lack of concrete policy from the Trump administration seems to be making gold a safe-haven investment.

Comex gold futures moved perfectly in line with our expectations. As mentioned earlier, though prices have fallen, the $1,190-93 zone could hold and the price could bounce higher.

We still maintain our broader bullish view of gold in the long-term. The current fall to recent lows could once again be an opportunity to do some bottom picking.

Near-term resistance at $1236/37 has been taken out and this level could hold supports going forward. The next important resistance is near $1,255-65. A push above here could even see prices stretching higher to $1,295-1300, where it is expected to repulse attempts to rise further.

The favoured view expects prices to initially find support around $1,235 and gradually edge higher from there. Only an unexpected fall below $1,224 could hint at weakness.

Wave counts

It is most likely that the fall from the all-time highs at $1,925 to the recent low of $1088, was either a possible corrective wave A, with a possibility to even extend towards $1,025-30 or a complete correction of A-B-C ending with this decline.

Subsequent to this decline, a corrective wave B could unfold with targets near $1,375 or even higher. After that, a wave C could begin 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. Failure to follow-through above $1,355 has dashed any hopes of an impulsive up move. We are tilted towards looking at this as a corrective wave C in progress.

RSI is in the neutral zone now indicating that it is neither overbought nor oversold. The averages in MACD are above the zero line, indicating a bullish reversal.

So, Buy Comex gold around $1,235 with a stop loss at $1,222 targeting $1,263 followed by $1,294. Supports are at $1235, $1,210 & $1,195 and Resistances are at $1,255, 1,263 & 1,294.

The author is the Director of Commtrendz Research and there is risk of loss in trading.