SINGAPORE: Spot gold may retrace to $1,336 per ounce and then rise towards its Aug. 28 high of $1,433.31 in four weeks.
A temporary top has formed at $1,433.31, due to a resistance at $1,430, which is provided by the upper channel line of a rising channel.
The metal seems to be falling towards the lower channel line, which is around $1,336.
It is no coincidence that the top formed at $1,433.31, as it followed the completion of a three-wave cycle around a key resistance at $1,440, the 100 percent Fibonacci projection level of an upward wave C, which has been driving gold from the Aug. 7 low of $1,272.64.
However, this three-wave cycle may extend into a five-wave cycle, with the current wave D progressing towards the lower channel line. The final upward wave E will then take over to push the price towards the $1,433.31.
If the presumed wave D travels to $1,320, it will have a better chance to approach $1,272.64, and the wave E target at $1,433.31 has to be aborted.
A break above the resistance at $1,440 will open the way towards a range of $1,503-$1,543, respectively the 138.2 percent and the 161.8 percent Fibonacci projection levels of the wave C 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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