SINGAPORE: Spot gold may break a resistance at $1,856 per ounce and test the next resistance at $1,867, driven by a wave (3) or wave c.

The rise from the May 16 low of $1,786.60 consists of five small waves.

This wave structure suggests the development of big five-wave cycle or a zigzag pattern.

A retracement analysis on the fall from $1,998.10 indicates a target of $1,867, as the metal broke the 23.6% retracement of $1,837.

his reading indicates a small chance of the rise to end around $1,856.

Thus, it excludes the possibility of a zigzag. Support is at $1,845, a break below which could cause a fall limited to $1,837.

Spot gold may rise into $1,856-$1,867 range

On the daily chart, the metal has climbed above a lower channel.

A duplicated upper channel suggests a target of $1,892. Strategically, this target will be confirmed when gold breaks the nearest resistance at $1,867.

The further gold rises, the more likely the uptrend from the Aug. 9 low of $1,684.37 would extend.