SINGAPORE: Spot gold may retest a support at $1,970 per ounce, a break below which could open the way towards $1,944. The metal is presumed to be riding on a wave c, which is expected to travel to $1,944, its 100% projection level.
The strong surge of the price triggered by the support at $1,970 is classified as a bounce.
Only when the bounce extends above $2,012, could this wave count and the bearish target of $1,944 be reviewed.
On the daily chart, the drop from the April 13 high of $2,049 looks systematic, as it resumed after a weak bounce on April 17.
Even though it is not very clear against which trend the drop is developing, be the one from the Feb. 28 low of $1,831.17 or the other from the Sept. 28, 2022 low of $1,662.59, the bearish divergence on the RSI simply suggests that the current correction could be very deep.
A study on a longer-term chart reveals a strong resistance around $2,073.
With the recent peak forming around $2,046, the pattern from the August 2020 high of $2,072.50 looks like a triple-top.
Further observation is needed.