SINGAPORE: Spot gold may retest a support at $1,844 per ounce, a break below which could trigger a drop into $1,816-$1,828 range. The fall observes two sets of retracements, on the uptrend from $1,615.59 and $1,727.50 respectively.
The bounce triggered by the support at $1,844 has ended around a resistance at $1,871. There might not be the second bounce.
A break above the resistance zone of $1,871-$1,878 could open the way towards $1,905. On the daily chart, the metal has broken a support at $1,858.
The break was accompanied by a doji on Tuesday, which raises some doubt on this break.
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A rise to $1,875 or a close above $1,858 on Wednesday would signal that this break was false.
The doji could be due to a pullback towards a bearish flag, which suggests a target of $1,793. A fall below the Tuesday low of $1,842.80 could confirm this scenario.
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