SINGAPORE: Spot gold may end its bounce around a resistance of $1,757 per ounce, and resume its drop thereafter.
The metal seems to be riding on a wave c, the third wave of an irregular flat from the Nov. 21 low of $1,731.40.
This wave is expected to end around its 161.8% projection level of $1,757.
A retracement analysis reveals that the 50% retracement coincides with this level.
At least, a correction is highly anticipated around $1,757.
A break above $1,757 could lead to a gain into $1,764-$1,772 range while a break below $1,750 could open the way towards $1,728-$1,741 range.
On the daily chart, gold may consolidate in the range of $1,721-1,788 for a few days before dropping again, as the pattern between July 2020 and July 2022 looks like a double-top.
The bounce from $1,613.60 is classified as a pullback towards the neckline of the pattern, only that the pullback has been a bit overdone.