SINGAPORE: Spot gold may retest a support at $1,299 per ounce, as suggested by its wave pattern and a projection analysis.
The current correction is driven by a wave (4), the fourth of a five-wave cycle from $1,195.90. This wave consists of three waves. The second wave labeled b may end below a resistance at $1,321, the 150 percent projection level of the cycle.
The third wave labeled c is yet to unfold. This wave c may travel into the range of $1,291-$1,299, as pointed by a rising trendline.
On a longer-term chart, gold failed to break a resistance at $1,317. The failure caused a correction towards $1,287, the 61.8 percent retracement of the downtrend from $1,365.23 to $1,159.96.
A break above $1,321 (first chart) could lead to a gain to $1,331.
* Charts are not available in reports received in email box through "Alert". To get charts, use the news code of TECH/C to retrieve the original reports.
** Wang Tao is a Reuters market analyst for commodities and energy technicals. The views expressed are his own.
No information in this analysis should be considered as being business, financial or legal advice. Each reader should consult his or her own professional or other advisers for business, financial or legal advice regarding the products mentioned in the analyses.
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