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Spot gold may retest support at $4,009

By Reuters News

SINGAPORE, Nov 11 (Reuters) - Spot gold may retest support at $4,009 per ounce, a break below which could open the way toward $3,950.

The bounce from $3,870 seems to have been driven by a wave (4), the fourth wave of a five-wave cycle from $4,696. This wave is expected to be totally reversed by a downward wave (5).

The bearish engulfing pattern forming between November 9 and November 10 signals a completion of the bounce and a progress of the wave (5).

On the hourly chart, the pattern between November 5 and November 9 looks like a double-top, which suggests a target around $3,895.

Strategically, the target at $3,895 will be confirmed when the market breaks $4,018. The current bounce is classified as a pullback toward the neckline of the pattern.

A break above $4,056 may lead to a gain into $4,071-$4,081. The double-top pattern will become invalid.

* 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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