Gold fell to a three-week low Tuesday, hurt by the dollar's strength, and Yoni Jacobs, chief investment strategist at Chart Prophet Capital, thinks the party's just getting started.
"The long-term target is still $700 [an ounce], which sounded a lot more ridiculous a few years ago" he told
CNBC. Gold hit a record high of more than $1,920 in September 2011.
"We reached $800 in the late '70s-[early] '80s bubble for gold. In the 2008 recession, gold bottomed right around $680, which is around $700. So there's a clearly defined trend line there."
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August gold contracts settled at $1297.10 an ounce on the Comex Tuesday, down $9.60 from Monday, before rebounding Wednesday morning.
Jacobs' book, "Gold Bubble: Profiting from Gold's Impending Collapse," came out in April 2012, when gold stood around $1,650.
But it won't be a free fall.
"Obviously, nothing falls dramatically that fast. It has to take some pauses on the way down," he explained, noting that there is support at $1,000 and $1,200.
Gold is in a "lose-lose situation," Jacobs noted. If the economy keeps growing, investors won't feel a need for safe-haven assets like gold. And if the economy falls back into recession, deflationary pressure often pushes all asset classes down.
"I don't think buying gold is going to be your solution" if you are concerned about the economy, he maintained. "I don't think that gold is going to be your safe haven and your savior."
Not everyone is bearish on gold. San Diego money manager Bill Gunderson thinks gold miner stocks now look attractive.
"Given the increased geopolitical risk in the world, particularly in the Middle East and the Ukraine, gold stocks are starting to move up in my rankings," he writes in a column for
MarketWatch.
Gunderson, editor of the Gunderson Report, particularly likes Randgold Resources, which has returned 38.9 percent so far this year.
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