SINGAPORE: Spot gold looks neutral in a narrow range of $1,845-$1,856 per ounce, and an escape could suggest a direction. The nature of the drop from the Monday high of $1,863.82 remains confusing.
The drop could be either a pullback towards a falling trendline or an extension of the preceding fall from the May 24 high of $1,869.49.
A break below $1,845 will confirm the extension of the downtrend towards $1,826-$1,838 range while a break above $1,856 could lead to a gain into $1,867-$1,875 range.
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The bias looks towards the upside on the daily chart, as a channel technique suggests an immediate target of $1,892, which will be available when gold breaks $1,867.
The consolidation within a narrow range of $1,837 to $1,867 is regarded as a prelude to a strong rally, due to the completion of a three-wave cycle from the March 8 high of $2,069.89.
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