SINGAPORE: Spot gold may break the resistance at $2,070 per ounce in the second quarter and rise towards $2,148. The recovery of the price from a low of $1,613.60 in September 2022 has been so strong that it almost reversed the drop from the March 2022 high of $2,069.89.
The strong surge bears the typical features of a wave five, the last of a five-wave cycle from 2015’s low of $1,045.85. This wave is expected to travel far above $2,070.
A rough calculation based on the range of the wave (4) suggests a target of $2,450. This aggressive target would be made possible by an extended wave (5), simply because the wave (3) failed to extend much, leaving a big room for the wave (5) to unfold into the sky.
The wave (5) looks sharp and fierce, full of the bullish momentum needed for its epic journey towards $2,450. The only decent correction it has experienced between February and March was quickly rectified.
This strong self-healing capacity of the uptrend guarantees its smooth extension over the next few months. Corrections could most likely be shallow and brief, as the metal is riding on a powerful wave 3.
A detailed study on the daily chart reveals a few realistic targets, which, even with the boldest calculation, still fall under $2,450.
Spot gold may test support at $1,963
Among them, the 100% projection level of $2,148 looks the most proper target in the second quarter.
It would strategically be available when gold breaks $2,008. A break below $1,936 may be followed by a drop into the $1,854-$1,885 range.
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