SINGAPORE: Spot gold is expected to retest a support at $1,296 per ounce, with a good chance of breaking below this level and falling more to $1,280.40.
The support is at the 23.6 percent Fibonacci retracement on the fall from the July 10 high of $1,345 to the Aug. 1 low of $1,280.40, working as the last barrier towards $1,280.40.
Wave pattern shows that gold is riding on a downward wave C, the third wave of a three-wave cycle that developed from $1,345. This wave is capable of traveling to $1,258, its 100 percent Fibonacci projection level.
Resistance is at $1,307, the 23.6 percent projection level, a break above which may cause a further gain to $1,320, the 61.8 percent retracement.
The views expressed are his own.
No information in this analysis should be considered as being business, financial or legal advice.
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