April 1, 2008
A simulation of yearly Gold prices as suggested by the current decline : 
No need to take Sinclair's bold challenge.
It is frankly admitted that this report may represent no more than an egregious example of jumping the guns as it is published so soon after the sharp fall of Gold in the past few days. Nevertheless, it is believed justified by technical and fundamental considerations and therefore is reported as a helpful exercise in prudence.
The main point of the report is a simulation of possible Gold prices for this year and next based on the hypothesis that the current weakness of Gold could represent the peak of the first wave of the bull market that started in 2001-02. This peak is regarded as similar to that seen in 1976 at the end of the first wave of the 1972-76 bull market. The principal trigger for the formulation of the hypothesis and the related simulation is the downward crossing of the stochastic indicator that occurred today in the Gold's yearly chart as a consequence of the price falling below $900. Normally, such crossing would be of little significance by since it is still early in the year and the situation could be reversed at any time before year end. However, this year the indicator has reached a very vulnerable level which makes it very price sensitive so that a reversal may not be so easily achieve if the price weakness becomes more pronounced in the near future.
On the fundamental side, it is pertinent to recall that the 1976 Gold correction coincided with the bottom of, and an early recovery from, an economic ecession, a circumstance that is also visible for the economy and stockmarket at the present time (see ).
The scenario contemplated here is illustrated below with a simulation of Gold prices using yearly charts. Specifically, the scenario projects two down years, 2008 and 2009, with prices going down to about $700 this year and to as low as $600 in 2009 before recovering back up to an yearly unchanged price of $700. Beginning in 2010, it is expected that Gold will begin a second wave of the bull cycle which will take the price at least to Mr. Sinclair target of "$1,650 by the second week of January of 2011 (see Jim Sinclair's bold challenge)   
 
The first two charts show yearly Gold prices with the Stochastic indicator. Chart 1 is with last week's price, Chart 2 with today price ($879). Chart 3 has a 4 years mavg line and projected prices for 2008 and 2009. Charts 4 and 5 show yearly Gold prices, actual and simulated for 2008 and 2009, plus the % of prices relative to the 4 years mavg. Chart 6 shows the most recent Treasury yield curve.