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As Gold Plummets, Pro Predicts $1,000 Floor

As gold broke below its 200-day moving average Wednesday, the “Fast Money” traders were split on where it was headed next — with one predicting it hits $1,000.

“It’s going to trade lower now,” said trader Anthony Scaramucci. “Central banks are raising cash and they’re selling gold. When you ask hedge fund managers, ‘What’s the first piece of security or asset in your portfolio that you move to to raise cash?’ It’s always gold.”

Scaramucci said that an evacuation pattern has emerged after the momentum cracked.

Gold traded at $1,578.80 per ounce midday, down more than 5 percent.

A day after economist Dennis Gartman sold his personal gold holdings, trader Steve Cortes also ripped it as an investment.

“I expect gold to continue to go lower — $1,500 I think is nothing. I think it’s going to $1,000 eventually,” he said.

Cortes echoed an argument from his book, “Against the Herd: 7 Contrarian Investment Strategies You Should Follow.”

“Gold is based completely on perception. Unlike a bond that pays a yield, a stock that pays a dividend or a piece of property that pays rent, gold pays you nothing. So you are relying 100 percent on the perception of its value,” he said. “It’s the greater fool theory, leveraged.”

Cortes said that the only safe harbor in a global investment storm is the U.S. — its dollar and treasuries.

Trader Rich Ilczyszyn said he wasn’t buying the dollar rally yet, preferring a short euro play.

Ilczyszyn still saw opportunities in gold.

“I think you could almost play the market from the long or short side and make money short-term,” he said. “You have to de-lever or certainly work out a strategy to protect your downside risk.”

Looking at options, Jon Najarian said there was a big surge in volatility, with gold up 54 percent for the day.

“We might see a bit of a bounce as people take off some shorts, but overall the damage that’s done here is probably going to pressure gold lower,” he said.

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Trader disclosure: On Dec. 14, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Scaramucci is long AAPL; Scaramucci is long C; Scaramucci is long INTC; Scaramucci is long EBAY; P. Najarian is long AAPL; P. Najarian is long MSFT; P. Najarian is long INTC; P. Najarian is long YHOO; P. Najarian is long MOS; P. Najarian has long calls BAC; P. Najarian has long calls JPM; P. Najarian has long calls WFC; P. Najarian has long calls BRCM; P. Najarian has long calls JOY; P. Najarian has long calls ETFC; Cortes is long TSN; Cortes is long SVU; Cortes is short EUR; Cortes is short AUD; Cortes is short GBP; Cortes is short Crude; Cortes is short AAPL; Cortes is short DB; J. Najarian sold puts GLD; J. Najarian sold puts AAPL; J. Najarian is long CBOE; J. Najarian is long CME; J. Najarian is long CIGX; J. Najarian has long call spreads JPM; J. Najarian has long call spreads GS; J. Najarian has long call spreads V; J. Najarian has long call spreads PNC; J. Najarian has long call spreads DMND

For Anthony Scaramucci
SkyBridge Capital is a fund of funds manager; funds in which SkyBridge funds invest may or may not own INTC.

SkyBridge Capital is a fund of funds manager; funds in which SkyBridge funds invest may or may not own EBAY.

For Mark Astrachan
Stifel, Nicolaus & Company, Inc. expects to receive or intends to seek compensation for investment banking services from Green Mountain Coffee Roasters Inc. in the next 3 months.

Stifel, Nicolaus & Company, Inc. makes a market in the securities of Green Mountain Coffee Roasters Inc..

Stifel, Nicolaus & Company, Inc.'s research analysts receive compensation that is based upon (among other factors)

Stifel Nicolaus' overall investment banking revenues.

For Chris Caso
SFG is a market maker in the securities of Broadcom Corp. (BRCM).

For Mark Mahaney
Within the past 12 months, Citigroup Global Markets Inc. or its affiliates has acted as manager or co-manager of an offering of securities of Groupon, Inc.

Citigroup Global Markets Inc. or its affiliates has received compensation for investment banking services provided within the past 12 months from Groupon, Inc.

Citigroup Global Markets Inc. or an affiliate received compensation for products and services other than investment banking services from Groupon, Inc. in the past 12 months

Citigroup Global Markets Inc. currently has, or had within the past 12 months, the following as investment banking client(s): Groupon, Inc.

Citigroup Global Markets Inc. currently has, or had within the past 12 months, the following as clients, and the services provided were non-investment banking, non-securities-related: Groupon, Inc.

Analysts' compensation is determined based upon activities and services intended to benefit the investor clients of Citigroup Global Markets Inc. and its affiliates ("the Firm"). Like all Firm employees, analysts receive compensation that is impacted by overall firm profitability which includes investment banking revenues

The Firm is a market maker in the publicly traded equity securities of Groupon, Inc.

For Jens Nordvig
No disclosures

For Rich Ilczyszyn
Ilczyszyn is short gold

For Jeff Bencik
No disclosures

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