SINGAPORE: Spot gold may test a resistance at $1,776 per ounce, a break above which could lead to a gain to $1,783.

The sharp drop from the Oct. 15 high of $1,796.28 came to a halt around a support at $1,764, the 38.2% projection level of a wave c from $1,744.84.

The support is strengthened by a similar one established by a rising trendline. The zigzag nature of the current move suggests a strong bounce to follow the deep drop.

Gold inches lower as dollar uptick dims appeal

A more optimistic scenario is the uptrend from $1,720.49 may resume, if the metal could keep above the support at $1,764. A break below this support may confirm the continuation of the fall towards $1,752-$1,757 range.

On the daily chart, gold failed to break a falling trendline resistance around $1,800. It also broke a support at $1,773.

The drastic move on Oct. 15 signals a continuation of the downtrend. Gold may fall towards $1,739 after a moderate consolidation around $1,773.

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