SINGAPORE: Spot gold may retest a resistance at $1,934 per ounce next quarter, as suggested by its wave pattern.

A big five-wave cycle from the December 2015 low of $1,045.85 is still developing.

The metal is riding on a wave V, which consists of five smaller waves.

The surge from the March 2021 low of $1,676.10 had been driven by the wave V-1 and the subsequent drop the wave V-2, which will be reversed by the wave V-3.

This wave V-3 will not only reverse the wave V-2, but also travel to or extend far above $2,072.50.

The pattern from the December 2020 low of $1,764.29 looks like an inverted head-and-shoulders, the right shoulder of which has just formed.

The pattern will be confirmed when gold breaks $1,934. It will suggest a target around $2,170.

Could the metal carry on its strong bearish momentum accumulated in the week from June 14 to June 18 and fall towards $1,710? The answer lies in the daily chart.

The correction from the Aug. 7, 2020, high of $2,072.50 adopted a typical corrective wave mode. Its complex structure only makes the picture clearer that a medium-term uptrend remains steady.

The sharp fall from $1,916.40 lost its momentum around a key support at $1,769, the 61.8% retracement. The fall may have more or less completed. It is expected to be reversed by the following rise.

A break below $1,769 may cause a fall limited to $1,734. A further drop could signal the continuation of the downtrend from $2,072.50.

The bullish outlook in the third quarter will be revised.

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