SINGAPORE: Spot gold may test a support at $1,783 per ounce, a break below which could cause a fall into $1,770-$1,776 range.
The metal failed to break a resistance zone of $1,791-$1,795, which is formed by the 61.8% retracement of the downtrend from $1,833.80 and the 100% projection level of an upward wave c from $1,744.84. It may retrace deeply.
Sharp as it is, the rise on Wednesday is classified as an extension of the bounce from $1,720.49.
The zigzagging mode of the uptrend from $1,744.84 suggests a deep drop to follow the rise.
A break above $1,795 could lead to a gain into $1,807-$1,814 range. On the daily chart, gold came close to the upper trendline of a wedge, which is supposed to be a bearish continuation pattern. The metal may fall towards $1,739-$1,773 range.
However, a break above $1,800 will make this pattern invalid.
A bullish target range of $1,828-$1,862 will be established accordingly.
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.