"David, Everything comes at a price - or not? Thanks to You I am a happy owner of Gold bullion since 2004. I noticed that you became cautious about holding leveraged positions in Gold at recent levels. Is there a price where you would even remotely consider to sell bullion?"

David Fuller's view Thanks for the feedback and well done for seizing your opportunity.

As veteran subscribers know, I have long regarded gold as hard money due to its unique record as a store of wealth throughout human history. However gold has also become an increasingly freely traded metal following President Nixon's suspension of the Bretton Woods Agreement in 1971. Consequently gold's price is strongly influenced by sentiment, just like any other asset.

Therefore in answer to your question, yes, there is a price or time at which I personally would consider selling gold or any other financial investment, because I am not a faith-based investor. Gold may be a religion for some people but the more expensive it becomes relative to other assets, the less I like it. For instance, I like gold less today than a year ago, not to mention ten years ago, precisely because it has been such a strong performer. I also like it less than platinum today because the Platinum/Gold Ratio has fallen to 1.2. This can go lower still, as we last saw in December 2008 when the price of platinum briefly reached parity with gold, but it is on the lower side of its historic range today.

The better gold performs, the more every subscriber may wish to consider their long-term strategy. For instance, if you plan to hold gold for the rest of your life, you need to recognise that there will be some big fluctuations, not least when global interest rates rise significantly. That will increase the appeal of high-yielding assets relative to non-yielding gold bullion.

If you prefer to manage your gold investment, you may wish to consider lightening positions when the price clearly accelerates higher relative to its medium-term trend mean represented by the 200-day moving average. If so, there is a decent chance that you will have an opportunity to buy back at a somewhat lower price. The better gold performs, the more you may wish to consider a trailing stop, because protecting what you have already made may be more important than holding out for the price you hope to see.

I have long maintained that gold's secular bull market will end in a mania. That may be some years away, although it is impossible to know in advance. The precise timing depends on how various events unfold. What we do know is that following manias it usually takes at least a generation or two for prices to regain their former highs. Meanwhile, the price chart is a far more useful guide of the supply versus demand balance than various attention-seeking price forecasts.

Incidentally, gold had a downside key day reversal today, as did silver. These may have checked the advances, at least in the short term, particularly if there is downside follow through tomorrow (Wednesday), continuing through US closing prices.