SINGAPORE: Spot gold is poised to break a resistance at $1,788 per ounce and rise into a range of $1,795-$1,798, driven by a wave e or wave b.
The metal is riding on either a wave e, the fifth wave of a five-wave cycle from $1,720.49, or a wave b, the second wave of a flat from the Oct. 14 high of $1,800.12.
Both of these wave patterns suggest a further gain into the target zone. A break below $1,776 could cause a fall into $1,757-$1,764 range.
On the daily chart, gold is retesting a falling trendline, a break above which could put the metal in an awkward position. The break is supposed to trigger a rise towards $1,828, but gold will have to face a strong resistance at $1,800.
Only when gold stands firm above $1,800 could a bullish target of $1,828 be established.
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Spot gold may bounce to $1,783 before dropping
Wang Tao is a Reuters market analyst for commodities and energy technicals. The views expressed are his own.
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.
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