SINGAPORE: Spot gold may test a support at $1,780 per ounce, a break below which could open the way towards $1,756-$1,766 range.

The metal failed to break a resistance at $1,806, the 186.4% projection level of an uptrend from $1,738.30.

The failure suggests the formation of a flat pattern, which developed from the Dec. 5 high of $1,809.91.

This pattern is characterised with its three component waves that are roughly equal in length.

The current wave (c) is expected to travel to $1,766.

A break above $1,797 could lead to a gain into $1,806-$1,816 range. On the daily chart, gold is still consolidating around $1,788.

The consecutive gains over the past few sessions are shadowed by an evening star forming between Dec. 1 and Dec. 5.

Spot gold may rise into $1,816-1,825 range

A rising wedge is contracting to point, the supper trendline of which suggests a maximum high of $1,820 that gold could reach.

Once the metal breaks the lower trendline support of $1,779, a bearish target of $1,721 will be established accordingly.