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…

See larger image

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.

For the best ways to play this trend, and more, join us at our Irrational Economics Summit in La Jolla in 14 days. See you there.

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Adam O'Dell
Adam O'Dell has one purpose in mind: to find and bring to subscribers investment opportunities that return the maximum profit with the minimum risk. Adam has worked as a Prop Trader for a spot Forex firm. While there, he learned the fundamentals of trading in the world’s largest market. He excelled at trading the volatile currency markets by seeking out low-risk entry points for trades with high profit potential. An MBA graduate and Affiliate Member of the Market Technicians Association, Adam is a lifelong student of the markets. He is editor of our hugely successful trading service, Cycle 9 Alert.