Gold investors need to carefully weigh their time horizons when playing the precious metal, Frank McGhee of Alliance Financial said Friday.
"We've certainly seen a continuation of the prior movement with gold falling off a cliff yesterday in reaction to the general forward-looking aspects of the market," he said, adding that it would likely continue to fall toward its "seasoned cost of production," around $1,050 to $1,100 per ounce.
"It'll take that much to get this market back to where we can find some stability and some long-term support."
On CNBC's "Fast Money," the head buyer of precious metals and gold bull said that one outlook wasn't positive.
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"I've been a bull forever and ever on this market," he said. "In the interim, though, what you have right now is the market starting to focus six months, eight months, a year out instead of focusing on the immediate short term."
McGhee said that when that occurs, gold becomes susceptible to economic data, the unemployment rate and talk of tapering easy money.
"That's when the market will take the type of correction we're seeing right now," he added.
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"Long-term, I think we've still got at least another $200 down," he said. "From there, I could see us go sideways in a fairly wide range, maybe as low as $850 to a $1,200 range for four to five months before we could even start to think about a rally again. We've done some serious damage in the intermediate term."
McGhee said that he was still bullish – from a certain perspective.
"I think it is definitely a good investment, depending on how you trade. If you're a trader, you have to be on the short side of this market," he said.
Long-term holders of gold would take a different tack.
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"We've seen a lot of people have some tremendous success with simple dollar-cost averaging types of investments," McGhee said. "
Trader disclosure: On June 21, 2013, the following stocks and commodities mentioned or intended to be mentioned on CNBC's "Fast Money" were owned by the "Fast Money" traders: Josh Brown is long JPM; Josh Brown is long XLU; Brian Kelly is long US dollar; Brian Kelly is long SPY puts; Brian Kelly is short DAX; Brian Kelly is short FISE 100; Steve Grasso is funds long MU; Steve Grasso is funds long AAPL; Steve Grasso is long BA; Steve Grasso is long BAC; Steve Grasso is long GDX; Steve Grasso is long GOOG; Steve Grasso is long MHY; Steve Grasso is long HPQ; Steve Grasso is long LNG; Steve Grasso is long MJNA; Steve Grasso is long NVIV; Steve Grasso is long PFE; Steve Grasso is long QCOM; Steve Grasso is long S; Guy Adami is long C; Guy Adami is long GS; Guy Adami is long INTC; Guy Adami is long MSFT; Guy Adami is long AGU; Guy Adami is long NUE; Guy Adami is long BTU.