SINGAPORE: Spot gold may retest a resistance at $1,788 per bounce, with a good chance to break this level and rise to $1,805.
The bounce was due to the completion of a five-wave cycle from $1,876.90. It may extend to the peak of the wave iv around $1,819.
A retracement analysis reveals a lower target of $1,805.
This wave mode suggests an extension of the downtrend far below $1,761. The trend is expected to resume upon the completion of the bounce around $1,805.
However, the resumption may come earlier as well, as the bounce looks disappointingly weak. It simply can't extend above a rising trendline. All the efforts of bulls seem to have contributed to a possible pullback.
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Support is at $1,778, a break below which could cause a fall into $1,761-$1,769 range. On the daily chart, the metal managed to stay above a support at $1,781.
It is likely to edge up to $803.
It must be noted that the downtrend from $1,876.90 remains intact, as both a wedge and the wave pattern suggest a further slide to $1,684.
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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