Gold Futures (U.S. $576.40 Fri. close)

As I see it, Gold is still busy digesting the $725 spike high that occurred in May/06. It has broken down through its 100-Day Moving Average, and poked its nose below its 200-Day Moving Average on my charts.

I believe that we are in the final ("C" wave) downside leg in the short term correction that could eventually take us to the $500 area from here. The underlying intermediate term uptrend remains intact. I would expect that in the absence of inflationary tendencies, gold producers would consider $500 to be extremely attractive in profitability terms.