Multiple bearish signals gathering! Bank of America warns: Gold's decline is far from over and may fall to $3,315
[Multiple bearish signals gathered! Bank of America warns: Gold's decline is far from over and may fall to $3,315] Since reaching a historic high in February this year, gold prices have continued to fall in recent months. On Thursday, Eastern Time, technical strategists at Bank of America warned that gold may still have room for a larger correction this year, and its trend may be similar to the devastating bear markets that occurred after gold prices rose sharply in 1980 and 2011.
Gold prices have continued to fall in recent months after reaching historic highs in February. On Thursday, Eastern Time, technical strategists at Bank of America warned that gold may still have room for a larger correction this year, and its trend may be similar to the devastating bear markets that occurred after gold prices rose sharply in 1980 and 2011. They proposed a staged buying strategy, recommending that full allocations be completed only when gold prices fall to the $3,450 to $3,250 range. A series of bearish signals converge Bank of America analysts pointed out in a technical research report that the current gold price has gathered a series of bearish signals, and the risk of continued decline is increasing: death cross pattern, high net long position level, warning top candle line, TD sequence exhaustion signal, and the RSI indicator reached 90 at the recent high - a level consistent with the gold price tops in 1980 and 2011. Gold price trend chart over the past year So far, the price of gold has fallen by 7.5% this year, with the largest decline of 16.8% in the past three months. “The current correction lasts only 24 weeks, compared with the 121-week uptrend,” said the strategy team led by Paul Ciana. “Although gold has fallen below the 38.2% retracement level of $4,149, the magnitude of this correction is still much lower than the previous uptrend.” In other words, even though gold prices have broken through the important Fibonacci support level, the duration of this decline still appears to be too short, and it is obviously insufficient compared with the previous bull market. Bank of America offers a sobering historical comparison: In each of the three major bear markets in gold since 1970, the correction was at least 50% of the previous rise. If this situation repeats this time, the downside risk to gold prices will point to $3,315. There is still room for correction in the short term However, the path of gold price decline may not be a straight line - Chiana believes that gold prices still have room to rebound in the short term. She wrote: "The price may first rebound to the $4325-4500 range, and then fall back to the 50% retracement level near $3702." The framework suggests that investors may be facing an attractive counter-rebound before the next significant move lower - a pattern consistent with the months following the 2011 highs. If this rebound is the start of a longer-term gold bear market, rather than a regular consolidation within a full uptrend, then BofA believes gold prices will be particularly vulnerable in the second half of 2026. Despite its cautious tone, Bank of America stopped short of recommending investors avoid gold entirely, instead proposing a phased positioning strategy that works in conjunction with price levels. "We tend to build a moderate position below $4,000, but given that downside risks still exist, it is more appropriate to gradually increase the position in the range of $3,700 to $3,600 and fully configure it in the range of $3,450 to $3,250." Chiana concluded. (