Test of the support at $1,900 looming?

In late May 2023, we expressed growing concerns about the short-term outlook for gold (on top of another warning preceding this one). Back then, we abstained from setting a price target but noted that $1,925 and $1,900 (and perhaps even $1,875) did not seem out of reach. Now, with $1,925 being taken out and gold dropping below $1,910, we believe there is still potential for gold to continue lower. This view is based on the fact that MACD, Stochastic, and RSI are all developing bearish structures on the daily time frame, and DM+ with DM- are in a bearish constellation. Furthermore, on the weekly time frame, MACD, Stochastic, and RSI also point to the downside. As a result, we expect gold to test support at $1,900 in the following days.

Illustration 1.01
Illustration 1.01 portrays the daily graph of XAUUSD. The yellow arrow indicates a bearish breakout below the sloping support (now resistance) that connects September 2022 low with February 2023 low.

Illustration 1.02
The picture above shows the daily chart of XAUUSD. Red arrows indicate the declining volume accompanying the declining price over the past few days. That is a positive sign for gold, suggesting that selling pressure is decreasing. Therefore, we will monitor this development in the next few days.

Technical analysis
Daily = Bearish
Weekly = Bearish

Please feel free to express your ideas and thoughts in the comment section.

DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.