SINGAPORE: Spot gold may end its bounce around a resistance at $2,031 per ounce, before resuming its fall towards $2,003. The metal found a support at $2,003, the 61.8% projection level of a wave c from $2,047.99.
The reaction of the market to this support is so strong that it suggests the formation of a wedge.
The upper trendline of the pattern points at a target around $2,031.
Given that this wedge appeared after a prolonged rise, it may turn out to be a top pattern.
Support is at $2,011, a break below which could be followed by a drop into $1,992-$2,003 range.
Spot gold neutral in $1,988-$2,018 range
On the daily chart, a bearish divergence on the daily RSI suggests an exhaustion of the rally and a coming deep correction.
It is observed that gold failed three times to break the resistance at $2,072.
The failures indicate the formation of a very bearish triple-top.
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