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Spot gold may retest support at $1,639

The support is identified as the 200 per cent projection level on an uptrend from $1,265.90.

Reuters|
Last Updated: Feb 25, 2020, 11.15 AM IST
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A shooting star forming around the resistance at $1,684 indicates a reversal of the uptrend from the Feb. 12 low of $1,561.16.

Commodity Summary
MCX

GOLD
SINGAPORE: Spot gold may retest a support at $1,639 per ounce, a break below which could cause a fall to $1,614.

The support is identified as the 200 per cent projection level on an uptrend from $1,265.90. A shooting star forming around the resistance at $1,684 indicates a reversal of the uptrend from the Feb. 12 low of $1,561.16.

Resistance is at $1,667, a break above which could lead to a gain to $1,684. A closer examination on the hourly chart reveals a five-wave mode on the fall from the Monday high of $1,688.66.

This wave mode indicates the development of either a zigzag or a medium-term downtrend. Regardless of the exact pattern, the metal may revisit the low of $1,642.89. Most likely, the moderate bounce from this low would extend a bit to $1,669 before being reversed by a fall.

Wang Tao is a Reuters market analyst for commodities and energy technicals. The views expressed are his own. No information in this analysis should be considered as being business, financial or legal advice. Each reader should consult his or her own professional or other advisers for business, financial or legal advice regarding the products mentioned in the analyses.

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