SINGAPORE: Spot gold may test a resistance at $1,803 per ounce, a break above could lead to a gain to $1,817.

The support at $1,786 may hold for a while as it is strengthened by a similar one established by a rising trendline. In the meantime, a five-wave cycle ended around this support, significantly increasing the chance of a further bounce.

A break below $1,786 could signal the continuation of the downtrend towards $1,758-$1,774 range.

On the daily chart, the metal is riding on a wave C, the third wave of a three-wave cycle from the August 7, 2020 high of $2,072.50.

Spot gold may extend bounce towards $1,803-$1,817 range

This wave is capable of travelling below $1,684.37.

The lower trendline of a wedge suggests a target of $1,684 as well.

As a result, the current bounce could be weak and short-lived.

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