Another target price for gold’s downside move just bit the dust. It’s a problem for gold fans, since each floor that fails makes it easier for the next one to fail. There is a silver (er, gold?) lining to this dark cloud, though — we’re getting closer to the ultimate bottom. On the flip side, the distance between here and there isn’t exactly what some would consider “close.” Indeed, the distance between here and there might well be enough to scare everyone into a bearish opinion of gold.

And that’s exactly what I’m counting on before becoming a full-fledged gold bull again.

The previously working floor for gold was $1,548 per ounce, per the rising support line I first discussed in my Dec. 15 article. That wasn’t my personal target, mind you. It was just the most common assumption (and most obvious spot) where gold finally would stop its bleeding, based on fairly sound reasoning that all the major lows since early 2009 would remain in a line.

Well, with today’s move to a low of $1,523.90 per ounce, a lot of gold watchers have been left scratching their heads. This support line is drawn in orange on the accompanying chart.

Click to Enlarge So now what? I’m still pounding the table on my original target of $1,442.30, give or take.

Just as a reminder, that target was based on the assumption of a 38.2% retracement of the distance gold traveled between the late-2008 low of $670 and the mid-2011 high of $1,920. That 38.2% pullback isn’t just a number pulled out of a hat, though. It’s an official, card-carrying Fibonacci number, which in simplest terms are natural “ebb and flow” reversal points for the market and individual stocks.

I honestly expected a lot of flack for my rather pessimistic expectation, for two reasons: (1) Fibonacci analysis is just one notch above using astrology to trade stocks, and (2) it was an amazingly deep cut, if suffered. To my surprise, though, nobody balked. Now I can’t help but wonder if that target will become the new widely accepted one, not just because of me and my outlook, but because there’s not another meaningful one anywhere else nearby.

There’s another factor that came into play with today’s move to lower lows, though — expectations.

While they grumbled the whole way down, gold’s bulls widely expected the commodity to hold the line around $1,550. Many of then even planned to buy in again there, expecting a bounce to ensue. Now that the floor didn’t lead to a bounce, a whole bunch of traders are being forced to rethink their bigger-picture view on gold; perhaps this isn’t just a mere blip after all. The planting of that seed of doubt, however, actually is a very good thing — especially if it sprouts.

You read that right — the most bullish thing that could ultimately happen for gold now is for the majority of the market to turn bearish on it.

It’s a contrarian view to be sure, but most market veterans will know that the market (and commodities, and individual stocks) zigs just when the masses expect it to zag. Case in point: While traders have been bullish on gold for three years now, those optimistic expectations were at multi-year highs in September, right before a complete meltdown. Point being, the stronger and more widely held the opinion is, the more apt we are to be at the end of that trend.

In the same sense, gold really won’t hit a bottom until the majority of gold’s traders are convinced gold is in an unstoppable downtrend and should be avoided at all costs. We’ve seen and heard some gold naysayers in the past three weeks, but those were fairly docile concerns … more annoyance with the pullback than clarion calls to sell all the gold you could. A move to the $1,440 area should instill some real bottom-making fear in gold’s bulls. Anything less, and it probably won’t be a true capitulation.

As of this writing, James Brumley did not hold a position in gold.