As you no doubt are aware, I am long gold and am happy to stay that way as I’m using it as a pure hedge but a quick look at the charts shows a steep upward trendline which could easily retrace to $1000/oz or below without endangering the uptrend. The major upmove began in 2005 from around $400 and the most recent upmove began in 2008 from around $700. If an interim top were to form and this last $565 up-leg were to retrace the minimum 38%, then that would take prices back towards $1050 and the up-trend would still be in total control. That’s the problem with trying to buy in a market which is already totally overbought. I’m not at all tempted to try and pick a top but will stick with my buy-big-dips strategy.
