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Gold can go much lower: RBC’s top technician

Tuesday, 10 Dec 2013 | 2:58 PM ET
RBC top technician: Gold could drop to $1,060
Tuesday, 10 Dec 2013 | 1:07 PM ET
George Davis of RBC says that the long-term picture for gold looks very week, with CNBC's Jackie DeAngelis and the "Futures Now" traders.

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.

(Read more: Here's what was behind gold's wacky jobs reaction)

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.

Steven Puetzer | Getty Images

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."

(Read more: As funds get massively short, gold could spike)

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."

—By CNBC's Alex Rosenberg. Follow him on Twitter: @C NBCAlex.

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