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.
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