Financial markets go in cycles. After a strong appreciation in prices there is time for correction. While I am not a believer in the Fibonacci wave theory, sometimes it is interesting to look at the so-called Fibonacci retreat levels. This time I am trying to use this theory to look at the entire bull market in gold.
Since its beginning in 2001, gold had gone up from $250 per ounce to $1,920 per ounce (in 2011). According to the Fibonacci theory, a corrections of 33%, 50% and 66% are the most probable ones. These days, gold is standing close to $1,083 per ounce, which is a point of 50% correction of the current big bull market. So the bottom could be in.
If not, another important level is $888, which means a 66% correction.