Spot gold may retest resistance at $4,198

By Reuters News

SINGAPORE, Oct 19 (Reuters) - Spot gold may retest a resistance at $4,198 per ounce, a break above which could lead to a gain into the $4,218 to $4,225 range.

The pattern between October 7 and October 14 looks like either a flat or a double-bottom. Both suggest further gains toward $4,218.

A projection analysis on a presumed wave C from $4,073 marks a slightly higher target of $4,225, the 100% level. Support is at $4,162, a break below which may trigger a fall into the $4,128 to $4,145 range.

On the daily chart, the downtrend from $4,696 could be reversing, as suggested by the metal's stabilization around a support at $4,096 and the bullish divergence on the RSI.

At least, a decent bounce could occur. A projection analysis on the downtrend from $4,512 reveals a resistance at $4,195, which is nearly identical to the one at $4,198 on the hourly chart.

A break could be followed by a strong surge into the $4,255 to $4,304 range.

* Wang Tao is a Reuters market analyst for commodities and energy technicals. The views expressed are his own. His analyses are published exclusively on the Workspace platform, a London Stock Exchange product.

** No information in this analysis should be considered as being business, financial, or legal advice. Each reader should consult their own professional or other advisers for business, financial, or legal advice regarding the products mentioned in the analyses.


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