Spot gold may retest resistance at $1,716
- On the daily chart, a bullish engulfing pattern formed, following the rise on Tuesday. It signals a further gain on Wednesday.
SINGAPORE: Spot gold may retest a resistance at $1,716 per ounce, probably after a drop towards $1,691.
The sudden rise from the Tuesday low of $1,679.09 is full of bullish momentum, which is likely to drive the price towards $1,746, as suggested by a falling channel.
However, the metal seems to have somewhat lost its momentum around a resistance $1,716. Chances are it may retreat towards $1,691.
Despite the strong bounce and its possible extension, the downtrend looks steady. It is still too early to conclude the trend has reversed, as this trend may eventually extend into the range of $1,634-$1,669.
On the daily chart, a bullish engulfing pattern formed, following the rise on Tuesday. It signals a further gain on Wednesday.
The rise could be driven by a wave 4, which could end around $1,750, as pointed by a falling trendline. It will be reversed by a downward wave 5 thereafter.
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