December 8, 2009 – The decline of the price of gold in the last week should prompt an investor to buy the commodity, said Allen Reminick, president of Blue Apple Trends.

Gold closed today at $1,132.70 an ounce, lower by $93.86 from a record price of $1,226.56 an ounce on Dec. 3. Gold is up 31 percent this year. Bullion has outperformed returns from the Standard & Poor’s 500 Index and U.S. Treasury 10-year notes this year, heading for a ninth straight annual gain, reported Bloomberg News.

Gold will rise, because the 241-trading-day cycle is still running for the metal, said Reminick. The cycle predicts a high around January 24, he said. Reminick uses mathematical time cycles to forecast market behavior.

“This sell-off is a buying opportunity,” said Reminick. “Gold will rise again, until late January, to more than $1250 an ounce.”

After the rally completes, Reminick thinks gold will revisit the $950 level next year.

The long-term story of gold will become clear in 2010, he said. If the price can stabilize above $900 and then work higher again, then the likely end point of the rally will be in 2012, with prices above $2000 per ounce. If gold goes lower next year, into the $700 to $800 area, then the highs of January 2010 are likely to be the highs for many years.

Time cycles are mathematical rhythms of market behavior, said Reminick. Identifying the cycles helps to locate time points for repeated highs and lows. Once the patterns in historical data are located, they can repeat for up to nine to 12 months on a daily chart basis, he said. Blue Apple Trends offers trading programs that use time cycles to predict market behavior.

-- Laure Edwards