SINGAPORE: Spot gold is poised to break a resistance at $1,789 per ounce, and rise towards the next resistance at $1,805.

Following its first failure on Dec. 8, the metal approached $1,789 again. This time, it is quite likely to clear this barrier and rise to $1,805.

However, the upside could be rather limited, as the drop from $1,876.90 adopted a five-wave mode, which suggests an extension of the downtrend below $1,761.

The wave iv ended around $1,819, below which, the bounce may end and be reversed thereafter. Support is at $1,778, a break below which could cause a fall into the $1,761 to $1,769 range.

Spot gold may retest $1,789; three-wave bounce incomplete

On the daily chart, the metal has climbed above a resistance at $1,781. It may extend gains to $1,803.

The downtrend from $1,876.90 remains steady, as both a wedge and the wave pattern suggest a target around $1,684.

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