Is Gold On Its Way To $817.50 /oz ?

The relentless decline of the last month has brought the futures down to a precarious resting spot just $10 above July’s key low at 1073.70. I expect it to be breached, although that won’t necessarily spell disaster.  A sharp rally “should” occur immediately thereafter, since the suffocating weight of prayerful bulls will be gone, stopped out by a dip beneath a level that too many of them are likely counting on for support. It is the extent of the snap-back rally that will matter, and a relatively feeble one would be telling. For if the futures cannot bounce at least $30 after piercing 1073.70, I’d infer they are on their way down to 1044.50 at least; and thence to an obligatory test of $1000, where they haven’t been for six years. Below this watershed sit two more targets, either of which could mark the end of the bear market begun in August 2011: 971.35 (see inset) or, my worst case, 817.50.

december_2015_gold

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