SINGAPORE: Spot gold may extend its bounce towards a range of $1,803-$1,817 per ounce, following its stabilisation around a support at $1,786.
The support is strengthened by a similar one established by a rising trendline.
Coincidentally, a five-wave cycle ended around these supports.
The drop from $1,5876.90 is so enough that it confirms a reversal of the trend from $1,720.49. As a result, the current bounce may be weak, to end below $1,817.
Gold price increases by Rs2,500 in local market
A break below the trendline support around $1,780 could confirm the continuation of the downtrend towards $1,758.
On the daily chart, both a wedge and the wave pattern suggest a medium-term target of $1,684.
The doji on Wednesday signals a temporary completion of the steep fall.
The main activity over the next few days could be a slow bounce.
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