"Dear David, thinking about a potential correction/consolidation of the overextended gold: in what context could one imagine this correction? A stock plunge that drags gold down? Because any other scenarios, (from debt defaults, debt restructuring, banks failures, bailouts from governments in the form of money printing) in my opinion would be bullish for gold? Do you imagine in which scenario, within this mess, could gold make a down move? Thank for your thoughts David."

David Fuller's view You are welcome and from the outside I wish to repeat that I think gold will go quite a bit higher over the next few years, not least for the reasons you mention. I have not attached a number (price target) to that view because it would be a meaningless guess, in analytical terms.

However, it is inconceivable to me that gold will not go way above its CPI inflation-adjusted level of 1980, as I have said before, given all the fiat currency printing that has occurred subsequently, plus all the additional global GDP growth which has occurred, not to mention all the additional people who are free to purchase gold should they wish to.

In the 1970s, the eventual bubble was fuelled mainly by demand from OECD countries. Today, India and China are huge players in the gold market and people of means within almost every other country are free to participate, should they wish to.

Nevertheless, it is neither normal nor sustainable for the price of gold or any other instrument to advance every week or nearly every day. Even in the strongest bull markets, and gold certainly qualifies, reactions and consolidations are not infrequent - look at the 10-year chart - and we occasionally see larger corrections within the secular trend, usually following overextensions relative to the 200-day moving average which approximates the trend mean.

These setbacks occur for many reasons, including: demand is temporarily sated; some profits are taken; the factors driving people into gold change, if only temporarily; the IMF or some other large holder sells more gold; stuff happens (a big category, when we think about it). Those in bullion funds need not worry about most of this, provided the price of gold does not surge dramatically relative to what we have seen previously within the secular trend.

There are few certainties in markets, other than that they will fluctuate. A more analytical way of phrasing this is that mean reversion is guaranteed at some point.

Fullermoney has always regarded silver (monthly, weekly & daily) as high-beta gold and having underperformed following its overextended spike earlier in the year, it may be the better relative performer over the next few months. Platinum (monthly, weekly & daily) has also firmed in recent weeks and although some temporary resistance may be seen near the range highs, this pattern can support significant gains over the next few months. Palladium's downward dynamics within the current range evident on this weekly chart have curbed my interest in this precious metal known mostly for its industrial usage in catalytic converters.