Gold held steady on Thursday as the dollar weakened after minutes from a US Federal Reserve meeting suggested that the central bank could take a more cautious approach to interest rate increases.

A broad consolidation is underway between $1,245-1,265. Ideally, we expect the price to inch towards $1,283-85 in the coming sessions post the consolidation. Once, the price manages to close above $1,272, a further upside towards $1,285 can be seen.

The favoured view expects prices to push higher towards the resistances mentioned above. A failure to cross $1,285 could once again result in loss of faith for gold. Only an unexpected decline below $1,230 could hint at a resumption of the downtrend.

Such a move could take prices lower towards $1,195, which is not our favoured view now. Price structures are supportive of an up move in the short-term while supports hold.

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 $1,025-30 levels 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. But, failure to follow-through above $1,355 has dashed any hopes of any impulsive up move.

As prices have broken certain important supports and shows weakness targeting $975, we are inclined to look 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 below the zero line of the indicator again, indicating a bearish reversal. Only a crossover again above the zero line could hint at a reversal in trend to bullish.

Therefore, Buy Comex gold around $1,245-50 with stop loss at $1,237 targeting $1,285.

Supports are at $1,245, $1,231 & $ 1,220 and resistances are at $1,274, 1,285 & 1,305.

The writer is the Director of Commtrendz Research. There is risk of loss in trading.