"I am amused by the "great aunt" comment.............are you seeing similar signs or is everyone waiting for a retracement in the gold price so they can buy in which case it may not pull back far?

"Are we at the "lift off" moment like we saw in July 1979?"

David Fuller's view Thanks for the link and a question which is certainly topical.

That trader had better hope that his great aunt does not see his quote. Personally, I welcome some cautionary comments on gold as a 10-day rally has increased the amount of bullish gold commentary in my avalanche of daily emails.


Technically, gold (daily, weekly & monthly) is a little overbought in the short term after a two-week rally and it is also moving somewhat ahead of its seasonal schedule. Ideally, those who are still building long positions should do so on setbacks within the rising trend. However there may not be many reactions as lots of people are jockeying for position. Many of them, perhaps a majority, are very wealthy people from India and China. They were not a factor in 1979.

Could this be the "lift off" moment for an accelerated and eventually climactic surge to the upside over the next few months, ending the secular bull market in gold?

It could be, but my guess is that it is not. While inflation is a problem in the growth economies, it is more muted in the west where some analysts maintain that deflation is the main risk. I continue to disagree, except for a few smaller countries mired in deep recession, and clearly they do not include the USA. Also, I do not see a Paul Volker in the wings who will attempt to crush inflation with sky-high interest rates. But when he does emerge, or more accurately is appointed, he will probably be of Chinese nationality rather than an American citizen.

Meanwhile, I maintain that we are approaching another seasonal advance for gold and other precious metals which could be significant, including some trend acceleration, as we have seen with earlier advances over the last decade.