Pman,

You noted,

"When all the newbies have sworn off gold for all eternity and many old hands will have been shocked to the point of loosening their grip on their positions, that will be the turning point in the market just like the huge correction in gold from 1974 - 76."

The seventies swoon was way worse than your worst case 50% retracement scenario. Your 50% retrace from 1450 to 1065 is a 26.5% drop; the '74 - '76 drop was 50% from 200 to 100.

I don't agree or disagree with your proposed thoughtful scenario, except that I do feel that a 50% drop in this day and age is extemely unlikely for sure. China and India weren't putting a floor under the market in the seventies, but are certainly now.