- A break above $1,774 may lead to a gain limited to $1,783
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.
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.
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