The decline suddenly picked up the intensity while we were expecting lower prices, we cannot say that we were expecting such a huge plunge to occur in one day. This strong move down indicates that Gold could trade well below 1300 before putting in a long term bottom. Many will start to scream that the bull is over, but nothing will be further from the truth. Every strong bull market experiences a back-breaking, and Gold is not going to be an exception to this rule. Prices will be at least double from Gold’s eventual low. So if the low is 1200, we expect Gold to hit a minimum of 2400 before there is any chance of a calling an end to this bull. In fact, we feel that price could actually soar north of 3000.
The precious metal’s sector and key commodities will be the big news in years to come as inflation rears its head. Though we did note not too long ago that the noise being made about inflation now was overblown and that the dollar would continue to head higher before it resumes its downward spiral and puts in a series of all-time new lows.
Asians are still bullish on the gold. It looks like Indian housewives see this as a buying opportunity which means that we still have one more down leg before a bottom is in place. Gold, therefore, could rally to 1500; former support turned into resistance before breaking down again.