SINGAPORE: Spot gold may test a support at $1,764 per ounce, a break below which could cause a fall to $1,747.
The bounce from the Dec. 2 low of $1,761.19 may have completed, as suggested by the drop on Tuesday. The drop from $1,876.90 adopted a five-wave mode, which indicates an extension of the downtrend below $1,761.
The trend is riding on a wave (3), which could at least travel to $1,747. This wave has a fierce character. It may unfold very fast. As a result, the following drop could be similarly sharp as the fall from $1,876.90.
Spot gold targets $1,805; upside limited
A break above $1,774 may lead to a gain limited to $1,783. On the daily chart, the lower trendline of a wedge points to a target around $1,700.
The question is, how long the metal is going to hover above a key support at $1,758. With a wave (3) unfolding, the support looks vulnerable. One more attempt on Wednesday may drive the price below this level.
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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