Does gold price slide mean rally in the precious metal is over?

Falling for the third straight day, gold prices today slipped below the Rs 27,000 level as it crashed by a whopping Rs 1,160 to Rs 26,440 per 10 grams in the national capital, taking cues from global markets where the metal dropped to an over two-year low.

Gold prices have declined nearly 20 percent while silver is down 23 percent in 2013.

So what does this latest slide in gold prices signify?

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Are signs of a recovery becoming more visible as a result of which interest in gold is beginning to peak out or is this a simple profit booking and risk aversion?

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According to commodities guru Jim Rogers, the drop in gold prices is the much-needed correction and he is currently not buying the commodity yet as it hasn’t dropped enough.

In an interview with Business Insider, Rogers says “I have repeatedly babbled about $1200-1300, but that is just because that would be a 30-35% correction which is normal in markets..But I am a hopeless market timer/trader.”

When it drops more, he will buy more of the metal. Rogers said he expects gold prices to fall further for the “foreseeable future” but expects “gold to eventually go higher over the decade.”

Even Frank Holmes of US Global Investors believes gold will see a 15 percent rally in the next twelve months, going by historical price changes.

“The math indicates that the metal will not stay at these lows. And in this negative real interest rate environment, we believe gold will return to more normal levels,” another Business Insider report quotes him as saying.