Yes, gold’s drop still has further to go.
For one, bubbled markets nearly always return to the price they were prior to the bubble forming. That puts gold futures at least as low as $500, where they traded in 2003.
And some Fibonacci analysis shows that even the minimum pullback expected from the prior bull market has not yet been accomplished. Take a look…
Gold’s dead cat bounce at $1,200 per ounce wasn’t all that surprising. The shiny metal had dropped nearly 40% in less than two years and $1,200 per ounce was the 50% Fibonacci retracement level… a natural place for gold’s downward spiral to take a breather.
As you can see above, the next stop on this train-ride to the bottom is the $1,000 to $1,050 per ounce range. This represents the 61.8% Fibonacci retracement level, and a support level based on price patterns that emerged in 2008 and 2009.
That puts about us $330 per ounce, or a 25% drop, below the current price. I think we’ll easily hit this target in 2014.
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