SINGAPORE: Spot gold still targets a range of $1,758 to $1,774 per ounce, as its bounce from the Nov. 24 low of $1,777.80 could have completed.
The bounce triggered by the support has been almost reversed.
The reversal signals a continuation of the downtrend.
Gold is struggling around a rising trendline, making its last attempt to rise.
However, the stabilization around $1,786 could be deceptive as the fall from the Nov. 18 high of $1,870.68 adopted a five-wave mode, which clearly suggests an extension of the downtrend below $1,777.80.
Strategically, the target of $1,758 will be confirmed when gold falls below $1,780. A rise above $1,799 may be extended to $1,817.
On the daily chart, the metal is riding on a wave C, which is capable of travelling to $1,684.37.
This wave, along with its preceding wave B, has been unfolding within a wedge, which looks like a bearish continuation pattern.
It is hard to estimate how many more days gold is going to remain flat. Price-wise, a break below $1,773 could confirm a continuation of the downtrend.
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