SINGAPORE: Spot gold may retest a support at $1,756 per ounce, a break below which could open the way towards $1,728-$1,379 range.

The sharp correction triggered by the resistance at $1,784 looks deep enough to confirm a completion of the wave c.

The rise from the July 21 low of $1,680.25 is presumed to consist of three waves only.

Based on this presumption, the uptrend may have reversed.

The current correction is expected to extend towards the bottom of the wave b around $1,711. However, gold managed to maintain within a rising channel.

This behaviour suggests the development of a five-wave cycle.

Spot gold may fall into $1,700-$1,711 range

It is insufficient to assume the development of an upward wave e, simply based on the stabilization of the price around $1,756.

A break above $1,773 could offer more weighting to this assumption, as it may open the way towards $1,784.

On the daily chart, the correction from the Tuesday high of $1,787.79 was obviously caused by the resistance at $1,772.

There is a good chance that gold would retrace towards $1,737.