I think the gold market is bi-polar. Or more accurately, I think investors are, by nature, at least somewhat bi-polar. Both technical and fundamental (notice the word "mental" in there?) evaluation of the factors driving gold leave any rational mind with the conclusion that gold must still appreciate in an expression of both its long-term suppression, and its robust supply and demand metrics.
I had assumed a study of gold's performance from 1975 onward might have revealed patterns that could be identified in the recent chart performance. This has simply not been the case. While the rise and fall of gold from the 70's to the 90's certainly had its own share of peaks and valleys, the curves are all different, and with one exception, bear little resemblance to the market now underway.
Market commentary is no more helpful in determining the future movement of gold, but does underscore the parallel between bi-polarism and market mentality. With increased volatility, the bears and bulls typically become more strident in their respective fomentations about bust and boom. Bull markets always generate a new crop of would-be prophets who all clamour for astronomical highs while pretending that has always been their position.
Given this mental dysfunctionality, rational investors should factor in this mania when deciding when to get in and out of markets so influenced. One day someone much smarter than me will create a piece of software that incorporates this. Until then, recognize that deep corrections are buying opportunities, and when there is no sane reason left for exuberant peaks, it's time to sell and maybe go short.
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Lightning cracks the blackened sky,
Hear the thunder chariot ride
All brave men with hearts of war
Ride the path of mighty Thor
