Gold Price Analysis: Elliott Wave downside targets point to the $1767 area

• Gold is testing a key support level as it trades 1.82% lower on Wednesday.
• There is a Fib confluence zone lower down that the market could be interested in.

Gold daily chart

The commodities complex is taking another hit on Wednesday after a tough start to the week. The recent persistent greenback strength has been a thorn in the side of the precious metal since the dollar consolidation began. Now there is a breakout to the upside in the dollar, gold is testing the support area which is the consolidation low.

The first place to start is the retracement from the all-time high. After the pullback the price retraced and the second wave up hit USD 2015.65 per troy ounce. This pullback stopped short of the 76.4% retracement but is still the Elliott Wave 2 starting point. 

That means the current wave could be wave 3. This is traditionally the longest wave and the Fibonacci extension level on the downside point to a test of the 161.8% area. Interestingly this confluences with the 50% Fibonacci retracement marked with the orange rectangle. If the downside support breaks that could be the target.

The indicators are confirming the bearish picture as the MACD histogram and signal lines are under zero. The Relative Strength Index is also looking very depressed too. It is important to remember the daily candle has not closed below the support area yet. Traders and investors must wait for confirmation.

Additional levels