Gold’s Decline Continues: Bearish Trends and Support Zones

Gold Forecast Video for 18.08.23 by Bruce Powers

Gold’s relentless decline hit another new retracement low today at 1,885, thereby triggering a bear trend continuation. The bearish continuation was indicated by yesterday’s daily close around 1,892. That put gold below the prior swing low of 1,893 and triggered a bearish trend continuation for the larger developing downtrend. At the time of this writing, gold is on track to close weak, near the low of the day, which points to further downside.

Fibonacci Confluence Zones Could See Support

There are several price zones to watch for possible support on the way down. The first is at 1,879 and is derived from prior swing highs where resistance was seen in the past. That price level is not further confirmed by other methods. Further down are two Fibonacci confluence zones where more than two Fibonacci levels mark a price support zone. In general, individual Fibonacci levels may provide a guide to price action but levels are more reliable when confirmed by multiple Fibonacci levels. Preferably, three or more. So much the better if there is also additional technical confirmation of a price zone.

If gold continues lower from here, and it is looking like it might, the first Fibonacci confluence zone starts at 1,871 and goes down to around 1,864. Further down is the next lower price from 1,839 to 1,834. These are price areas to watch for signs of a bullish reversal that would confirm support is holding and rejecting price to the upside.

Nine Bear Candles in a Row

Today is the ninth consecutive day of lower daily candles. It indicates that the retracement is getting old and due for a stall or bounce. You can see how the relative strength index (RSI) oscillator is reaching close to oversold. However, in the recent uptrend it never got that low (below 30). Natural gas has not dipped below the 30 oversold level since the last significant bottom at the beginning of the current uptrend. That was in September of last year.

For a look at all of today’s economic events, check out our economic calendar.