SINGAPORE: Spot gold is expected to test a support at $1,761 per ounce, a break below which could cause a fall to $1,726.

The metal is riding on a wave C from $1,875.26, which is unlikely to end around $1,783, as it has deeply pierced below this level.

Most likely, this wave would extend to $1,726. The journey towards this level could be choppy, as a strong support is observed at $1,761, which is strengthened by another one at $1,764.29, the Nov. 30, 2020 low.

The metal has to overcome these barriers before reaching $1,726. On the daily chart, gold faces another support at $1,769, which is working together with the two supports on the hourly chart to stop the fall.

Gold has started a consolidation, which may be confined in the range of $1,769-$1,805. The downtrend is expected to resume upon the completion of this consolidation.

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