Comex gold futures ended higher on Friday gearing towards its highest annual profit in three years, supported by a languishing dollar and a strong outlook for precious metals in 2011.
Gold priced in euros, British pound and Swiss franc rose to all-time highs this year as the European Union bought out Greece and Ireland. Holdings in exchange traded products backed by precious metal gained 17 percent, and increased demand for gold coins. Gold expected to rally further next year as inflationary pressures continue to build and interest rates remain low. With oil prices threaten the psychological $ 100 / bbl, gold prices only expected to be higher in 2011 violated.
However, the only negative is that many funds are heavily exposed that could result in a sell-off. This would especially be on the back of a potential turnaround in the U.S. economy.
Comex gold futures, contrary to our expectations. As warned in the previous update, which is an increase over the $ 1,398 would decrease the chance of a reduction.
Daily close above $ 1,408 is no longer bearish scenario for now. Potential exist for a test of $ 1,450 to $ 1.475 to 1.500 or even higher levels. Immediate resistance at $ 1.430-35 levels. Support will be seen in the $ 1.405-10 zone now. Only a drop below $ 1,363 could signal the beginning of a sharp drop corrective. Such a decrease could aim for the above levels or even lower to $ 1,300 level.
Weekly picture still shows several differences, which could drag prices down. Although the stage is clear for a push higher in unknown territory, a strong retracements and pullbacks are allowed.
Our wave counts are changed after an unexpected rise above $ 1,385.
We will now look at the current fifth wave impulse and momentum, not only corrective wave “B”. We still favor a possibility of fifth wave impulse remains above $ 1,455 or up to $ 1,475.
Only a daily close below $ 1,365, now confirms the beginning of a potential ABC, and a corrective movement has begun.
RSI is still in the neutral zone now indicating that it is overbought or oversold. The averages in MACD are above the zero line of the indicator signal bullishness intact.
Therefore, look for gold futures to test the resistance.
Supports are $ 1,410, $ 1,398 and $ 1,365. Resistances are at $ 1,425, $ 1,435 and $ 1,450.
source:bussinesline
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