Gold Update

Given Tuesday's sharp slide in gold, traders wonder how long it will be before global investors re-enter a long position.

If last year's gold pattern is any indication, it may be a long while before the near-term target of $700 is seen.

In 2006, gold bottomed out around $533.60 in March and then rose to $730 mid-May.

Gold, in the wake of an emerging market/commodity meltdown, proceeded to steadily decline.

Market players tried to pick bottoms in gold, but these trades were painful as the precious metal ratcheted lower, hitting $543 on June 13.

Gold rallied to $676 in July and then saw steady declines to $559/$560 in October.

From October onward, gold rose, with only minimal slippage on any downward correction.

Nevertheless, it took 7 months for the precious metal to get back over last July's highs and even then gold stalled Fri, Mon, and Tues just under $690.

Nevertheless, with no change in metals "fundamentals" and geopolitical tensions high, we still see scope for a near-term test of $700. Spot gold holds at $665.75/oz