SINGAPORE: Spot gold may retest a resistance at $1,847 per ounce, a break above which could lead to a gain to $1,876.
The metal is riding on a powerful wave (iii), which is capable of travelling to $1,876. It is unlikely to be disrupted by a deep correction until it reaches this level.
A drop to $1,827 could confirm a break below the support at $1,830. A bearish target of $1,816 will be established.
On the daily chart, gold has stabilized around a former resistance at $1,828, after climbing above this level.
It is rising toward a falling trendline, which establishes a resistance around $1,850.
A break above the trendline would signal a reversal of the downtrend from $2,072.50. However, the break may not trigger a big gain.
Instead, it could be followed by a consolidation around the trendline, as gold will face a strong resistance at $1,874, the 50% retracement of the downtrend from $2,072.50 to $1,676.10.
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