Spot gold to consolidate in $1,702-$1,774 range

SINGAPORE: Spot gold is expected to consolidate between $1,702 and $1,774 per ounce for one or a few trading sessions before picking up the rally.

The bullish sentiment has been deeply hurt, with the correction from the Aug. 23 high of $1,911.46 narrowly missing $1,695, the 50 percent Fibonacci retracement on the rise from $1,478 to $1,911.46.

It will take some time for the bulls to regain their strength to push the metal up. A long-shadowed hammer formed on the daily chart, signaling the possible bullish reversal at the previous trading session's low of $1,702.44.

The metal may first retrace to $1,739 on Friday.

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.

Copyright Reuters, 2011