SINGAPORE: Spot gold may retest a support at $1,783 per ounce, a break below which could cause a fall to $1,761.

The metal is riding on a wave C from $1,875.26, which may travel to $1,726, its 100% projection level. A bearish pennant points at $1,726 as well.

The support at $1,783 temporarily holds. It triggered a moderate bounce which may end around $1,801. A further gain to $1,818 could be unlikely even if the metal breaks above $1,801 unexpectedly.

On the daily chart, gold has broken a support at $1,805, the 50% projection level of a downward wave C from $1,959.01. The metal may test the next support at $1,769.

It is not very clear if gold could break $1,769 in its first attempt, as this support is strengthened by another one at $1,764.29 and the support at $1,761(hourly chart). Most likely, a bounce could occur around $1,769.

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