Gold can go much lower: RBC’s top technician
Gold could pop in the next few weeks, said George Davis at RBC, but once it does, it will present a terrific shorting opportunity on the path down to $1,060.
"Eventually, we will see a retest of the $1,180 area," Davis said on Tuesday's "Futures Now." Once bullion breaks below that level—its 2013 low—"we're going to see an increase in bearish sentiment that potentially takes us down to $1,100 initially and potentially the $1,060 level."
Another 15 percent below current levels, $1,060 would be the lowest gold has traded since February 2010.
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Davis, the chief technical analyst for fixed income and currency strategy at RBC, has nailed the call on gold this year. On Sept. 5, when gold was trading at about $1,375, he called into "Futures Now" to predict that gold would drop to $1,200. On Wednesday and Friday, gold put in lows just shy of that mark, at $1,210.
While Davis has a bearish view on the metal, he said it would soon correct its sharp downward slide.
"Over the next week or two, we could see a corrective rally that potentially takes us up toward the $1,310 area," he said. "A lot of the technical indicators are oversold, so I think you have to be waiting to scale into the short positions."
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David doesn't expect 2014 to bring gold bulls any good news, though.
Gold will likely break below $1,180 in "mid-January or mid-February—that type of window," he said. "And if that breaks, look out."