Gold (basis the active Comex December 2009 contract) gapped through old resistance at 1033 last Tuesday. It is now technically (and fundamentally, due to the $USD's continuation of its year-long downtrend) set up to run. Nobody knows how far.
Most of the best miners are still playing catch-up. AUY, GG, NXG, AEM, GOLD, and RGLD still haven't made new all-time highs (exceptions would be GOLD and AEM), but are poised to do so by year-end.
Silver still lags. And, in spite of the blatherings of the financial press, for good reason. It is not a world central bank reserve. Gold is the dog, and silver is the tail. Still, on most bull runs like this one, silver outperforms gold because it is the "thinner," less liquid market, on a world-wide basis.
Since the latter part of October and early November are cyclically weak periods, I am posting this information only to warn you. Do NOT chase these markets without tight mental stops. But, if you are interested (and you should be), DO have the guts to buy the dips, as they will occur... unannounced.
5% pullbacks should be bought.
My dilemma lies in whether or not to take huge profits, now, and wait, or sit tight and add on the dips.
Gold could fill its gap (cash 1019) or simply motor on. If it is the latter, you missed the move. If it is the former, the train hit a cow (or, more appropriately, a bear) and had to stop momentarily before resuming its run to whatever destination lies ahead. If it is the former, you should buy quality miners. They won't stay undervalued to bullion forever. After all, they mine the Great Yellow Turd at fixed costs. AUY and GG are the best plays, as I have been preaching since 2006 -- both are priced for around 700-800 gold.
I am sorry to be a broken record. I know NONE of you will heed this counsel, but, hell, most of you watch oscilloscopes with your eyes (as opposed to listening to music with your ears), so what else should I expect?
Again, the point of this post is not to urge you to buy. It is to urge you NOT to chase, and to buy smart -- that would be on the corrections. Many of my best friends (who do not subscribe to this site) ignored me at 250, 300, 400, 450 (a crucial level), 500, 700, and, yes, the fateful break above the nominal (i.e., not adjusted to inflation) 1980 highs at 850. Now, they all want in. Now. With gold at 1065 at today's close.
I am making a fortune. I deserve it for paying attention to reality. You may regard that last as arrogance, but I work hard, every day, charting these markets and analyzing the CFTC-published Commitments of Traders Reports. You earn what you work for.
Good luck, good listening, and this is the LAST you will ever hear from me on this subject.