Over the past several weeks, gold has declined from a high of $730 to a low near $620 yesterday. But until Thursday, gold remained in a moderately bullish position above significant support at $640. Now that it has been broken, the $650 level will act as stiff resistance and will likely cap any rally attempt in the near future.

Thursday's breakdown below $640 creates sell signals on several technical indicators. The Relative strength index slipped below 50, and the +DI line on the ADX closed below the -DI line -- both signaling that the larger trend is now down. These signals say nothing about the likely short-term direction of gold over the next few days, but they do suggest that this decline is more than a short-term correction.
Gold could be in the middle of such a scaled correction right now, but there is also the possibility that gold has started a larger correction. Gold could easily decline from here and leave the long-term uptrend intact. A decline to $600 before a turn higher would leave the rally from mid-2005 intact, and even a decline all the way down to the low $500s would keep the long-term uptrend healthy and intact. As gold continues its decline from $730, the key levels to watch are $610, $570 and $535.

I feel we are in a consolidation correction period of gold just like the 70's and it will last for at least 9 months.
Then after that gold will go to 800 and then 1000 and possibly to 2000 all by the year 2010.