SINGAPORE: Spot gold may test a resistance at $1,700 per ounce, a break above which could lead to a gain to $1,710. The metal has found a support at $1,689.
Based on its reaction to this barrier, it seems to have temporarily completed the drop.
Gold may consolidate above this support for one or two days.
It must be noted that the downtrend is riding on a wave 3, which is expected to travel to $1,671.
Even if the bounce could extend to $1,710, it won’t be able to reverse the downtrend.
A break below $1,689 will confirm the continuation of the downtrend. On the daily chart, the downtrend looks far from complete.
It remains firm within a falling channel, which suggests a target around $1,582.
The current fall is closely related to the preceding drop from $1,877.05.
A projection analysis reveals a higher target zone of $1,611-$1,686.