Gold could fall 40% from peak: Prechter

The price of gold could drop 40 per cent from its all-time high because of bearish technical momentum and deflation amid a European debt crisis, said Elliott Wave International President Robert Prechter on Monday.

In January, he had forecast that gold could drop at least 40 per cent from its peak value because of deflation and over-ownership.
Asked if Prechter still expected gold to correct 40 per cent, he said that extremes in technical indicators still "leave gold vulnerable to that large of a decline."
"I still feel that gold is not going to the moon here. It's not a market that you want to be long, just as you didn't want to be long stock in the first quarter."
In addition, Prechter said investors should be out of the equity markets completely and he continued to expect U.S. stocks will fall below the March 2009 low of about 666 points on the S&P 500 index.

Prechter is known for forecasting a big bull market in stocks in 1982 and for getting out before the 1987 stock market crash.

I don’t think that the gold price would ease till world economic turbulences are over. As EU crisis expected to aggravate further, Gold may touch new high soon. Then Prechter’s predictions may prevail.

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