SINGAPORE: Spot gold is due for a correction to $1,860 per ounce, as the rally becomes exhausted.
A five-wave cycle that started from Aug 15 is approaching an end, and the following correction could go as deep as $1,860, a presumed wave (iv) trough.
Multiple bearish divergences formed on the RSI indicator, strongly signaling gold has been much overbought and is technically very weak.
A rise above $1,911.46 will be limited to $1,927.
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Copyright Reuters, 2011