SINGAPORE: Spot gold may test a resistance zone of $1,897 to $1,900 per ounce, a break above could lead to a gain to $1,923. A wave c has travelled above its 138.2% projection level of $1,884.
It is expected to extend to the 161.8% level of $1,897.
A retracement analysis on the trend from $1,959.60 to $1,804.20 reveals a similar target of $1,900.
A high-low bottom suggests the target zone of $1,897 to $1,900 as well.
After the continuous gains over the past few days, gold is expected to take a break around the $1,900, which could trigger a decent correction. Support is at $1,871, a break below could be followed by a drop into $1,856-$1,863 range.
On the daily chart, the current rise is tentatively classified as a bounce against the fall from $1,959.60.
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A projection analysis on the uptrend from $1,727.50 reveals a resistance at $1,898, which falls within the zone of $1,897-$1,900 (hourly chart).
A pause or completion of the bounce is highly anticipated around this barrier.
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