Correction in Gold Nears a Key Target
by Rick Ackerman
Gold and Silver got whomped again yesterday, adding yet more carnage to a correction that will soon enter its fifth week. For long-term investors who have chosen to ride out the storm, the selloff must seem brutal. And yet, from early December’s high at $1432 to yesterday’s $1310 low, the loss so far has amounted to just 8.5 percent. Granted, it’s been worse for some owners of mining shares, which have declined by a little more than 17 percent, basis the ARCA Gold Bugs Index. But even that falls shy of the 20 percent standard that is often applied to distinguish moderate corrections from truly ugly ones.

How much further will bullion and precious metal shares fall? Rick’s Picks has been using a worst-case target of 1296.50 for the Comex February contract. It was first identified in the following trading “tout,” with the futures hovering around $1332: “A 1296.50 target can be tortured out of the chart I’ve furnished, and its [technical] provenance is shown in red. Because the pattern yielding that target is so visually un-intuitive, and because the breach of $1300 would touch off a minor panic, I’d categorize 1296.50 as a back-up-the-truck price where February Gold could — and should – be accumulated aggressively.”