Prechter : Gold & Silver Due for a Major Fall

Gold has fallen sharply in recent days, but its supporters are undaunted: The yellow metal remains within earshot of its all-time high and is destined to soar as the dollar implodes, gold's bulls say.

As is often the case, Bob Precther, president of Elliott Wave International, takes the contrarian view, arguing there's "too much optimism" about precious metals and negativity around the dollar.

In fact, Prechter believes the dollar put in a major bottom last week and, as a result, foresees major weakness ahead for commodities generally, and gold and silver specifically. The precious metals are "heavily overbought" and the "path of least resistance" will be to the downside for many months, he says. "[Gold's] going to go much further [down] than people think."

Prechter predicts gold will follow silver's path, which has put in a series of lower highs in recent months.

"Even though people are one-sidedly bullish on precious metals, they're not making any progress at all," says the legendary market watcher. "I would not be loading up on gold at this point, you'll get a better opportunity later.