SINGAPORE: Spot gold may retest a support at $1,756 per ounce, a break below which could open the way towards $1,728-$1,379 range.
The sharp correction triggered by the resistance at $1,784 looks deep enough to confirm a completion of the wave c.
The rise from the July 21 low of $1,680.25 is presumed to consist of three waves only.
Based on this presumption, the uptrend may have reversed.
The current correction is expected to extend towards the bottom of the wave b around $1,711. However, gold managed to maintain within a rising channel.
This behaviour suggests the development of a five-wave cycle.
Spot gold may fall into $1,700-$1,711 range
It is insufficient to assume the development of an upward wave e, simply based on the stabilization of the price around $1,756.
A break above $1,773 could offer more weighting to this assumption, as it may open the way towards $1,784.
On the daily chart, the correction from the Tuesday high of $1,787.79 was obviously caused by the resistance at $1,772.
There is a good chance that gold would retrace towards $1,737.
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