Whilst the main equity market looks set for at least a moderate down turn this week, lets consider the grand picture for the two primary precious metals, in terms of standard Fibonacci retracement.
Gold, 20yr, historic
Gold has broken the 10MA, and whilst the price is still pretty close to the peak, the trend is certainly a little weaker. The various indicators are bearish, at least in the near 3-6 month term, so the notion of $1400, even $1200 is very valid. A pull back to the 38.2 fib; would be easily acceptable, and that still doesn't mess up the long term up trend. I can only imagine the gold bugs fierce complaints across the various message boards if $1200 hits, and not realising that the primary trend is still intact.
Silver, 20yr, historic
Silver has of course already suffered a severe decline since last years peak of $49. Having already retraced to the 50% fib', that leaves the 61.8 around the $21.50 level. Only a break under $20 would seriously violate the long term trend.
Summary
Gold remains much stronger than Silver, and certainly also much more stable. Even a huge move lower in the metals this summer - or for even a longer period, would not violate the currently relentless upward trend.
Best guess - considering the wider macro-economic situation (I hold to a somewhat deflationary view - at least for another year or so), Gold to $1200, and Silver to $20
Despite the current weakness, relative to the equity indexes, both gold and silver have performed spectacularly across the last decade. You sure can't eat metals, but you sure can purchase a lot more with them - relative to just about everything else.
As many might agree...stack...and keep stacking.
