price, goldDuring the current up and down of the gold price I read about the $1600 mark as a critical one several times already. Investors are afraid that hitting the $1600 mark will trigger a huge price drop. What is this fear based on? Why should dropping below $1600 have such a devastating effect?
The gold price should only act as an example for the bigger question. What defines those critical marks that people hope for or are afraid of? Is it only a psychological effect or is there something more substantial behind those predictions?
This question is off-topic so I have made a close vote, but I will give you are rough answer, since one has to know the answer to this question in order to understand that it is unrelated to economics.
I believe that this price mark comes from technical analysis of the pricing of an asset. This specific price mark could be the result of a double-buttom pattern. I know this, even though, I would never use technical analysis in order to make a buying decision.
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