On 26th January, speaking at the World Economic Forum 2013 in Davos, Switzerland, George Soros considered gold as the 'Ultimate asset bubble'. The question here is how high can gold price goes before the bubble bursts ?
On Bloomberg TV yesterday, referring to Monday's 10% drop, Marc Faber said, "I love the markets. I love the fact that gold is finally breaking down". "That will offer an excellent buying opportunity".
"I think we're going to have a major low in gold within the next couple of weeks".
"I'm not worried. I'm happy gold is finally coming down, which will provide a very good entry point".
From the chart :
Refer to my previous posts on Gold, I continue to maintain that the current drop is the wave 4 pullback of the major wave (III).
Assuming this current wave 4 correction has the same magnitude as that of the wave 2 correction, with a 34% pullback, the end of wave 4 is likely to be at 1270 level.
As shown above, Monday's closing price of 1329 can be the end of sub-wave (vii) and the current rebound can be sub-wave (viii). The next sub-wave (ix) drop will end the wave C of wave 4 at around 1270 level.
The gain for wave 1 is 310% and that of wave 3 is 182%, by assuming the percentage increase of wave 5 is also about 182%, wave 5 may move from a low of 1270 to a high of 3580.
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