"The one problem the gold market has is that is has become overly dependent ... to investment demand by the funds, and the funds have a different mindset," he said. Nadler said that funds will need to raise cash and show profits where they can headed into the end of the third quarter.

Chart watcher David Banister, chief investment strategist at TheMarketTrendForecast.com, echoes Nadler's price target. "I had $1,643 weeks ago as a possible low and $1,580 as another one," he said. Banister says he started to buy long positions after gold sank through $1,650. "Gold should be putting in a bottom over two to three days here ... we will add down to $1,620 over the next one to two days of trade."

Despite the lack of current safe-haven demand, physical buying could support gold prices. Nigel Moffatt, head of Treasury at Gold Corp., which operates the Perth Mint, is expecting "robust" demand in China and India next year in the gold market.

"If you look at India and China, they are always going to be buyers," Moffatt said. He said India is a big buyer when the price falls and that China just buys, sometimes buying at record prices.

"Most of our buyers tend to buy when prices are at its highest mainly because the precious metal gets into the media then and prices are going crazy, so they tend to buy a lot," he said.

Moffatt said if the gold price dropped hundreds of dollars and stayed lower, then retail investors could get scared off, but there would still be strong bulk demand from China and India.

Gold mining stocks were destroyed Friday. Kinross Gold ( KGC) tanked 3.81% to $15.15, while Yamana Gold ( AUY) lost 6.82% at $13.74. Other gold stocks, Agnico-Eagle ( AEM) and Eldorado Gold ( EGO)were trading lower at $60.80 and $17.31, respectively.


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-- Written by Alix Steel in New York.

>To contact the writer of this article, click here: Alix Steel.

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Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.

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