David Fuller's view This 10-year semi-logarithmic chart of weekly gold prices shows most of its current bull market history. Interestingly, we are presently in the third reasonably similar medium-term consolidation phase prior to a resumption of the secular upward trend.

The two previous medium-term pauses followed strong advances which peaked in May 2006 and March 2008. You can also see a lengthy pause following the high in early 2004, before the advance really gathered pace once again in the second half of 2005, although its shape is different with a consolidation high occurring in late 2004, about halfway through the pattern.

Big, multiyear trends are unique in appearance because they all have their own distinct characteristics. These usually include a degree of repetition due more to behavioural characteristics observed by participants, rather than the fundamental economic factors which propel the overall trend, although these may also have some influence on the rhythm of the move, best seen on a long-term semi-logarithmic graph such as I posted above.

There is another difference with the gold trend's overall consistency which you have probably already noted. The last move upwards was considerably longer and somewhat stronger, even in percentage terms. Was the bull market gathering pace? Possibly, and it was certainly attracting more participants but the overall rate of advance has not changed all that much in percentage terms, as you can see.

Now let us look a more sensitive chart, namely the more familiar five-year arithmetic weekly graph which subscribers have seen on many occasions. This certainly looks like it is now in a bullish consolidation phase as I have said before. Basically, the lows held earlier this year and were followed by a strong rally back to $1800, where two previous highs had occurred. However, the following setback only retraced 50% of the move (depending on where you measure from) before strong demand was encountered near the 200-day MA.

Nevertheless, many potential buyers of gold will remain cautious because it has been ranging for 15 months. However, if I am right about the bullish consolidation phase, gold should move back above $1800, possibly before yearend and almost certainly before the end of Q1 2013. Once investors around the world see gold not only breaking above $1800 but also finding support near that level on setbacks and a further consolidation of gains, many more people will turn bullish. Their additional demand should keep the price reasonably firm, followed by a test of the 2011 highs. Once those levels have been taken out and both traders and investors see that gains are being held, a strong and generally consistent new uptrend should be underway. On previous evidence, a significant advance above the previous highs should commence around March or April, and possibly sooner.

However, if I am talking rubbish gold will not move above $1800.