Technical analyst Deepak Kumar, who specializes in Elliott Wave Theory, has made a disappointing forecast for the gold price in the years ahead.
XAU will likely prove to be a slow-acting poison for long-term investors who bought the precious metal at prices above $5,000. Gold prices could fall below $2,400 within the next few years, thus eroding confidence in the asset’s high potential among buyers who are susceptible to fear of missing out. wrote Kumar.
In January, Deepak published a chart indicating that the XAU would rise to a maximum of $8,389, after which a prolonged bearish trend would begin. Gold prices began to fall, barely reaching $5,600, which is within the analyst’s «Normal Zone.» Therefore, Kumar’s words are worth heeding.
Deepak’s XAU price prediction on the chart
If his prediction comes true, the price of gold will bounce sharply off the support barrier at $4,000. Currently, an ounce of the precious metal give $4,497, and the downward trend is likely to continue on Monday when trading resumes. In this case, buying XAU at around $4,000 and then selling the asset at, say, $4,400 would yield a 10% profit. I’ll add that the RSI on the daily chart points to a strong correction upon reaching $4,000, which will definitely end up deep in oversold territory.
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