Gold Monthly Analysis
Gold is now approaching a 20% decline from the all-time top we called in January, when the bullish chorus was almost impossible to ignore, from prominent gold advocates to every smart appliance with a market opinion.
That makes the next move especially important: will this decline officially open the door to a lengthy bear market, or do bulls still have one more chance to defend the larger structure?
In this weekly analysis, we examine Gold’s evolving setup across multiple timeframes, review the key levels and downside targets, and outline the most probable paths as the metal approaches its next decisive move.
CANDLES
This week, Gold bounced off the 200 DMA for the second time. However, the bounce was not strong enough to avoid a tiny 8/20 EMA bearish cross on the weekly frame.
Statistically, this event signals a continued decline in the 7–25% range, which, in the worst-case scenario, would translate into a 38% loss from the top. We have not seen this signal in over three years, and the record magnitude of several supporting signals could push Gold toward the lower percentiles of the projected range.
This means Gold now has a very real chance to break through the 200 DMA support and eventually form a 50/200 DMA bearish cross, which would add further psychological pressure on recent buyers.
If, or when, a 50/200 DMA death cross develops, it could help define another target for the current decline.
Gold continues to slowly expand bearish momentum on the mid- and long-term frames. Overall, the metal is neutral in the short term, but neutral-bearish on the mid- and long-term horizons.
Annual Candles
(no changes in this section)
In the annual analysis, we noted that Gold was trading well above its annual Bollinger Bands, a condition that typically resolves through a move back inside the range. That process now appears to be underway.
As the bands shift lower, the updated targets now point to a potential 32–48% decline from the peak, reflecting both the evolving structure and adjusted technical expectations.
A move toward the 20 EMA, which would imply a potential drawdown of roughly 64%, should not come as a surprise either. While that may sound extreme, this is often how highly extended moves unwind: not necessarily through one dramatic collapse, but through a prolonged reversion process that gradually pulls price back toward its long-term technical mean.
ELLIOTT WAVES
Based on the technicals, Gold has slightly better odds of following the red path, although the difference is marginal. The blue path remains firmly on the table.
If Gold follows the red scenario, however, it would represent a textbook classical large correction under Elliott Wave and Prechter guidelines. The structure would fit the idea of a broad, complex corrective phase rather than a simple straight-line decline.
Note the inset showing a classical long-term corrective formation from Robert Prechter’s book. The key point is that wave B can be very complex and may take several months to fully develop.
SUMMARY
Gold remains under serious technical pressure, and the key concern is that several independent methods are starting to point in the same direction.
The annual Bollinger Band reversion, the weekly 8/20 EMA bearish cross, the potential future 50/200 DMA death cross, and the Elliott Wave structure all support the idea that the current decline may not be finished. Each method frames the risk differently, but the message is broadly converging: Gold may be in the early or middle stages of a larger corrective process rather than a completed pullback.
The convergence is especially important because the downside estimates are no longer isolated. The annual Bollinger Band targets, the weekly EMA-cross statistics, and the Elliott Wave red path all support the possibility of materially lower levels over time.
Until Gold produces a strong reversal signal, the weight of evidence remains neutral-bearish, with multiple technical methods reinforcing the same broader warning.
