Why Gold Price Is Going Down And Won’t Get Up Again In The Long Term

Gold is once again going down. Gold price is now at 5 years low. Gold fell more than 1 percent to a five-year low on Wednesday as a bounce in the dollar fuelled downside momentum, with investors continuing to pull away from the metal after its dramatic slide earlier this week.

Now there is a strong opinion that gold is going down and wont get up again. With the rise in the popularity of the crypto currencies like the Bitcoin, the days of gold as the best alternative to dollar are going to fade. As we move into an ever-techier world, gold has more competition: namely cryptocurrencies such as bitcoin that cater to the new generation of skeptics. The bitcoin market touts itself as an alternative to the currency markets and a hedge against inflation. Bitcoin’s value, like gold, is based on the confidence of the buyer, nothing more. Cryptocurrencies may also even prove to be useful (at which point they most likely will be unattractive to bitbugs). This isn’t to say gold trading will disappear. It’s just that there’s more competition.

If you look at gold XAU/USD charts, you will see a clear bearish descending triangle. There has now been a clear trigger of a bearish descending triangle formation in Gold (XAU/USD), as can be seen in the monthly chart below. Initially, there was a false breakout last November (dropped below $1,180.20), and another test of support of the pattern in March of this year. Each time Gold managed to rally to some degree before hitting resistance and forming a lower swing low, reflecting underlying selling pressure. What’s being seen now is a classic continuation of a long-term downtrend.

The odds now favor an eventual decline to at least approximately $926.80, which is the measuring objective derived from the descending triangle.