Gold price may fall further before hitting bottom, Bank of America analysts say

Gold prices may have further to fall before reaching a sustainable low, according to Bank of America technical analysts. While the bank remains optimistic about gold's long-term prospects, analysts warn that the current correction might extend. They suggest that a more solid bottom could form after testing support levels near $3,600 per ounce.

“

Gold's correction this year has retraced the prior overextended rally, but whether it has put in a sustainable low is still in question.

Paul Ciana, a technical analyst at Bank of America, noted in a recent report that gold's current pullback has corrected an overextended rally but questions whether a sustainable low has been established. He pointed out that the current correction has lasted only 24 weeks, significantly shorter than the preceding 121-week uptrend. Although gold has fallen below the 38.2% Fibonacci retracement level of $4,149, the correction period is still considered brief in comparison to the prior ascent.

Ciana anticipates that selling pressure on gold will likely persist through August and September, based on technical indicators. However, he views the price decline as a buying opportunity for investors. He advises a strategy of gradually building positions to average down costs.

“

The current correction has only lasted 24 weeks, while the prior uptrend lasted 121 weeks. Although gold has fallen below the 38.2% retracement support at $4,149, the correction time is still significantly shorter compared to the previous uptrend.

"We would look to begin to scale in modestly below $4,000 if the market offers that opportunity, but given the downside risk still present, we would look to add further in the $3,700 to $3,600 range and build a more complete position in the $3,450 to $3,250 range," Ciana stated. This recommendation comes after Bank of America officially lowered its average gold price forecast for 2026 by 14% to $4,360 per ounce a week prior to the technical outlook report. Despite this revision, the bank still projects gold prices could climb to $6,000 by 2027.

“

We would look to begin to scale in modestly below $4,000 if the market offers that opportunity, but given the downside risk still present, we would look to add further in the $3,700 to $3,600 range and build a more complete position in the $3,450 to $3,250 range.