Spot gold's potential test of support and bearish continuation pattern

Gold's potential support test and bearish pattern

In Singapore, spot gold is expected to test a support level at $1,981 per ounce, which could potentially lead to a drop towards the $1,960-$1,969 range. The current consolidation period is thought to be driven by a wave b, the second wave of a three-wave cycle from $2,048.71. The wave b is predicted to be followed by a downward wave c. This wave b has been unfolding within a wedge, which appears to be a bearish continuation pattern that will lead to a drop. However, if gold manages to break above $2,009, it will confirm the wedge as a bullish pattern and suggest a target range of $2,030-$2,049.

Gold's daily chart and potential for a deep drop

On the daily chart, a rising trendline indicates that gold may have a target around $1,923. The sideways move within a narrow range of $1,963-$2,004 could be a preparation for a deep drop. This indicates that spot gold may be facing a bearish trend in the near future.

Spot gold's potential to end bounce below $2,009

The current uptrend in spot gold, which began on Feb. 28, seems too linear to sustain. As a result, it must be corrected by a significant drop. The probability of such a drop is increasing due to a possible triple-top that is developing around $2,073, which suggests a target around $1,600. This indicates that spot gold may not be able to sustain a bounce above $2,009.

Forex traders must be cautious with spot gold

Forex traders should pay close attention to the developments in spot gold's prices and trends. The potential for a significant drop in gold prices could have a significant impact on forex trading. As a result, traders should be cautious and take appropriate steps to manage their risks.

The impact of global events on Forex and spot gold

Spot gold's prices and trends are not only influenced by local factors, but also by global events. Forex traders must keep track of international developments, such as geopolitical tensions, global economic performance, and the strength of the US dollar, all of which have an impact on the price of gold. This indicates that forex traders must maintain a broad perspective and monitor international events to better understand the potential impact on spot gold's prices and trends.

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