Spot gold may drop to $1,758; downtrend resumed

SINGAPORE: Spot gold may drop to $1,758 per ounce, as it has broken a support at $1,780 and a rising trendline.

The break confirmed a continuation of the downtrend from $1,876.90 and a reversal of the uptrend from $1,720.49. Over the next few days, the metal may slide towards $1,720.49.

The current moderate bounce is regarded as a weak pullback towards the trendline. Unless gold could stand firm above the trendline, the bearish outlook will remain unchanged.

On the daily chart, the metal is riding on a wave C, which is capable of travelling to $1,632. The lower trendline of a wedge points at a higher target of $1,700.

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Based on the weak bounce triggered by the former support at $1,783, gold may fulfil these targets very soon.

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