SINGAPORE: Spot gold may test a support at $1,683 per ounce, a break below which could open the way towards $1,666.

The drop on Wednesday confirmed a continuation of the wave C towards the range of $1,666-$1,683.

The pattern from the July 13 high of $1,745.19 looks like a pennant, which suggests a target of $1,666 as well.

This wave has much extended. Its ending point remains unknown.

Spot gold may retest resistance at $1,721

Simply based on the projection analysis, it could travel to $1,683 or $1,666. Resistance is at $1,700, a break above which could lead to a gain to $1,711.

On the daily chart, the metal is falling towards a strong support zone of $1,680-$1,684.

The fall is expected to pause in the zone, followed by a bounce, as suggested by the falling channel.

A break below $1,680 could trigger a drop to $1,662.