SINGAPORE: Spot gold may bounce more into a zone of $1,960-$1,979 per ounce, as it has found a strong support at $1,890.
The support is provided by the 61.8% retracement of the uptrend from $1,779.20 to $2,069.89. It is strengthened by a similar one of $1,891.
The strong reaction of the market to these supports indicates a reversal of the downtrend from $2,069.89.
Immediate support is at $1,929, a break below which may cause a fall into $1,903-$1,917 range.
On the daily chart, the fall from $2,069.89 is presumed to have been driven by a wave C, the third wave of a three-wave cycle from $2,072.50.
A projection analysis on this wave reveals a strong support at $1,918, around which a bullish hammer formed on Wednesday.
This is a typical reversal signal. The metal may rise towards $1,976.
The downtrend from $2,069.89 remains intact. It may resume upon the completion of the bounce.
Each reader should consult his or her own professional or other advisers for business, financial or legal advice regarding the products mentioned in the analyses.
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