SINGAPORE: Spot gold may break a support at $1,938 per ounce, and fall into a range of $1,919-$1,929. The break will probably occur after a moderate bounce to $1,957, as the metal seems to be consolidating within a wedge.
Until the upper trendline or the lower trendline of the pattern is broken, it will be hard to confirm a strong bounce or a deep drop.
However, the bias looks towards the downside, as the wedge appeared after a downtrend.
It is highly likely to become a bearish continuation pattern.
On the daily chart, the consolidation above a trendline is over, as the line has been broken.
Spot gold may retest support at $1,938
The break marked a major achievement of bears, as it confirmed a reversal of the uptrend from $1,613.60. Five waves make up the trend.
The wave D ended around $1,800, which became a target.
A rise above $1,963 could signal the break below the trendline was false.
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