SINGAPORE: Spot gold may test a resistance at $1,847 per ounce, a break above which could lead to a gain to $1,876.

The metal is riding on a powerful wave (iii), which is capable of travelling to $1,876. A shallow correction from the May 7 high of $1,842.91 seems to be ending around a support at $1,830.

A drop to $1,827 could confirm a break below the support at $1,830.

A bearish target of $1,816 will be established then.

On the daily chart, gold is rising towards a falling trendline, which establishes a resistance around $1,850.

A break above the trendline would be a major victory of bulls, as it confirms a reversal of the downtrend from $2,072.50.

A retracement analysis on the downtrend reveals a resistance at $1,874, the 50% level, which will pose a big challenge. A consolidation around this level is much expected.

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