SINGAPORE: Spot gold looks neutral in a range of $1,700 to $1,711 per ounce, and an escape could suggest a direction. The metal failed to break a resistance at $1,721.

The failure was followed by a drop so deep that those early signals of a trend reversal have been much weakened.

A break below $1,700 could confirm the continuation of the wave C towards $1,683, while a break above $1,711 may lead to a gain into $1,721-$1,728 range.

On the daily chart, the metal is managing to stabilize around a support of $1,706, the 161.8% projection level of the downtrend from $1,998.

Gold recoups some losses on dollar weakness

The first attempt of the metal to reverse the downtrend has failed, as suggested by its failure to break a resistance at $1,727.

The long-shadowed doji on Monday does not look like a promising signal of the second bounce towards $1,727.

It instead indicates a drop towards $1,680-$1,684 range on Tuesday.