SINGAPORE: Spot gold is expected to drop to $1,376 per ounce, as it failed to break the upper channel line of a rising channel.
The failure indicates that gold could be dropping towards the lower channel line, which is about $1,336. Wave pattern shows that the uptrend from the June 28 low of $1,180.71 has adopted a three-wave mode, consisting of waves labelled A, B, C.
A Fibonacci projection analysis reveals that wave C has travelled a similar distance as wave A. Coincidentally, the 100 percent projection level at $1,440 is near the upper channel line.
The bearish divergence on the hourly MACD suggests gold is due for a deep drop and the 61.8 percent projection level at $1,376 seems to be a realistic target.
No information in this analysis should be considered as being business, financial or legal advice. Each reader should consult his or her own professional or other advisers for business, financial or legal advice regarding the products mentioned in the analyses.
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