SINGAPORE: Spot gold may seek a support in a zone of $1,925-$1,929 per ounce and then stabilize around this zone or bounce towards $1,960.

The zone is formed by the 50% retracement of the uptrend from $1,779.20 to $2,069.89 and the 261.8% projection level of a downtrend from $2,058.96.

Either of these supports is strong enough to temporarily stop the fall and trigger a bounce. When working together, they are stronger.

A break below $1,925 could open the way towards $1,890, while a break above $1,959 may lead to a gain to $1,979. On the daily chart, the big black candle on Monday and the break below $1,959 strongly suggest a further drop to $1,925.

The current drop may have been driven by a wave C, the third wave of a three-wave cycle from $2,072.50.

This wave is capable of travelling into $1,673-$1,825 range.

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