SINGAPORE: Spot gold may break a support at $1,766 per ounce and fall into $1,748-$1,755 range, as a bounce triggered by this support has completed.
The drop on Monday was deep enough to confirm a reversal of the uptrend from $1,738.50.
A retracement analysis on the trend marks accurate supports and resistances. Indeed, the longer trend from $1,615.59 may have reversed, as gold has broken a rising trendline.
The bounce triggered by the support at $1,766 is classified as a pullback towards the line.
Only a break above $1,783 could indicate the extension of the uptrend.
On the daily chart, the false break above a resistance at $1,788 also suggests the reversal of the uptrend from $1,615.59.
Further indication comes from an evening star forming between Dec. 1 and Dec. 5.
Gold may fall towards $1,721.
A break above $1,788 may suggest the extension of the uptrend towards $1,820, as suggested by a rising wedge.