Gold’s Descent Continues: Breakdown Confirmed, Bears Dominate

Gold Forecast Video for 23.06.23 by Bruce Powers

Gold continued its descent today, breaking down from a consolidation pattern and dropping decisively below the lower trendline of the pattern. It is on track to close below the line today, which would confirm the breakdown and a continuation of the declining trend. Further, today’s candlestick is a wide range red candle with the open near the high of the day’s range and a likely close near the low. This reflects the bears being in charge heading into the end of the session.

Fibonacci Retracement Completed Today

Today’s decline reached a low of 1,913, which has almost completed a 61.8% Fibonacci retracement. The Fibonacci level is at 1,91. Also, today potentially completes a measured move, where the current correction matches the prior correction. The current retracement off the 2,082-record high has been 8.1%, slightly exceeding the previous retracement of 7.9% started from the early-February swing high. Essentially, they are equal as of today. A bottom or bullish reversal can occur off the completion of a measured move. The fact that the 61.8% retracement also completed in the same price area, supports this scenario.

Trend Remains Down and Targeting 200-Day EMA

Regardless, the trend remains down, and gold is closing weak. If it falls below today’s low and keeps dropping, it will be testing the 200-Day EMA, which is currently at 1,895. Also notice that an internal uptrend line has been added to the chart showing potential support close to current prices and the 200-Day EMA.

Relationship with 100-Day EMA

The relative relationship between price and the 100-Day EMA has weakened. Whether that plays a part going forward remains to be seen. Could it be a clue pointing to a deeper retracement? Certainly, it increases the likelihood that gold will test support of its 200-Day EMA before the retracement is complete. During two tests of the 100-Day line in the first quarter of this year gold fell below the line and closed below it on four days. The 200-Day line was close by at that point and support was seen there instead. The situation now is a little different given that the distance between the two lines has expanded. This time gold is clearly further below its 100-Day line than it was during the test in the first quarter.

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