Technical Analysis: Gold makes lower lows
Gold price broke out of a rectangular consolidation (red-shaded area in the chart below) – probably a Bear Flag continuation price pattern – on May 29. Bear flags are like upside-down flags with a steep decline – the “flagpole” – followed by a rectangle or square price consolidation – the “flag square”.
The breakout of the flag square activated the Bear Flag’s downside target at $2,295 (the 0.618 Fibonacci extrapolation of the flagpole that formed from May 21-23).
The target for the break below the trendline lies nearby at $2,303 (the 0.618 Fib. extrapolation of the down-move prior to the break).
Gold has step-declined to lower lows since then, providing further bearish confirmation following the breakout. Recently bears managed to push the price down to $2,314, only $11 away from the first downside target
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