SINGAPORE: Spot gold may retest a support at $1,660 per ounce, with a good chance of breaking below this level and falling towards $1,644-$1,651 range.
The bounce from the Sept. 16 low of $1,653.10 has been shaped into a bearish triangle, which is classified as a continuation pattern, suggesting an extension of the downtrend.
The bounce triggered by the support at $1,660 is regarded as a pullback towards the triangle.
Only a break above $1,671 could make this pattern invalid, a target range of $1,679 to $1,685 will be established then. On the daily chart, the downtrend remains firm within a falling channel.
The consolidation within a range of $1,657 to $1,686 is about to end.
It is classified as a pullback towards a bearish flag, which indicates a target of $1,611.
The metal is expected to fall below the range, as indicated by the black candle on Tuesday.
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