SINGAPORE: Spot gold may test a resistance at $1,954 per ounce, with a good chance of breaking above this level and rising to $1,978.
The metal has been trying to recover from the Feb. 25 low of $1,882.75. The recovery looks strong, as a big part of the preceding drop has been reversed.
Simply based on this reversal, it is reasonable to assume the uptrend from $1,779.20 has resumed. Support is at $1,928, a break below which could cause a fall into $1,902-$1,917 range.
On the daily chart, the long-shadowed shooting star on Feb. 24 looks less bearish than it did, after the gains over the past few days.
Even though this pattern had been well confirmed, it simply failed to have the anticipated impact on the trend, only causing a moderate consolidation.
The only explanation to this exception lies in a much strong bullish sentiment, which could have been helping maintain the uptrend steady. Strategically, the continuation of the uptrend will be confirmed when gold climbs above $1,984.
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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