Gold Price Analysis: Breaking Down the Precious Metal’s Decline and Future Potential

Gold Forecast Video for 19.05.23 by Bruce Powers

Gold reaches its first lower target today at 1,966 and keeps falling, reaching a low of 1,952 for the day. That’s 6.2% below the recent trend high. The next lower target is around the 50% retracement of the second swing up off the November bottom at 1,944. That price zone also completes the 127.2% projection of the CD leg of a falling ABCD pattern. At 1,966 the CD leg of the retracement trend matched the decline of the AB leg. Depending on when and if it is reached the 50% retracement will be close to the uptrend line, which marks dynamic support for the uptrend. Further down is the 61.8% Fibonacci retracement zone around 1,915.

Weakness May Carryover to Tomorrow Session

The precious metal has been falling for six of the past seven days and is due for a bounce. Nevertheless, it is on track to close weak, in the lower third of the day’s range. That weakness may carryover to tomorrow’s session. There are lower targets that gold looks to be heading towards.

No Indication of Capitulation or Signs of a Bullish Reversal

Gold remains in a well-defined rising trend. Regardless, a test of support around the lower trendline is possible, especially given the downside momentum seen in gold. The decline has accelerated in the past few days. There is no indication of capitulation or signs of a bullish reversal. Potential support of the 200-Day EMA is a little lower than the uptrend line at 1,879.

Completion of Current Correction Should be Significant

The completion of the current correction could be significant. Once the correction is complete, gold should be ready to attempt another breakout to new highs as the rising trend channel continues to progress. The most recent new high was at 2,082 on May 4. This correction is the next opportunity for buyers to position themselves at lower prices for possible new highs. Once gold is trending higher than 2,082 there is the possibility of accelerated moves as awareness of the long-term bullish breakout spreads. A daily close above the May 4 swing high will confirm a breakout of a 12-year cup with handle base. The longer the base the larger the potential move out of it.

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