SINGAPORE: Spot gold may test a support at $1,711 per ounce, with a good chance of breaking below this level and falling toward $1,700.
The metal failed twice to break a resistance at $1,739.
The failures confirm a completion of the bounce from the July 21 low of $1,680.25. The bounce was driven by a wave 4, which will be reversed by the current wave 5.
The slow drop from the July 22 high of $1,738.99 is regarded as a prelude to a much faster fall, as a wave five is generally quick and sharp.
A break above $1,721 may lead to a gain into $1,728-$1,739 range.
On the daily chart, the downtrend remains intact within a falling channel.
Spot gold may test support at $1,711
The trend could have resumed, as the metal failed to leave the channel.
A break above $1,828 would be the very early signal of an escape from the channel. It may open the way towards $1,775.
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