David Fuller's view As we approach the end of 2011, with gold (historic, weekly 10-year, weekly 5-year & daily) registering its 10th consecutive annual gain but currently over $350 off its September high to date a review of the price action seems appropriate.

A point which stands out is that following gold's climactic acceleration in August we have seen its most significant technical deterioration since 2008, and from a higher level. This evidence is corroborated by the technical picture from its high-beta sister metal silver (historic, weekly 10-year, weekly 5-year & daily) which peaked last April.

The chart of platinum (historic, weekly 10-year, weekly 5-year & daily) also shows a breakdown in the last two months, in this instance from a lower high.

Palladium (historic, weekly 10-year, weekly 5-year & daily) has been the steadiest futures-traded precious metal recently but rallies have been checked by resistance from this year's earlier top formation. Also, palladium alone surged to a bubble peak in January 2001 which has yet to be challenged.

What is to be made of this year's technical action?

Sticking to the technical facts: 1) the medium-term corrective phase, which was reaffirmed earlier this month, shows no evidence that it is over; 2) rallies above last Wednesday's highs (Dec 21st) would be required for gold, silver and platinum to question current scope for somewhat lower levels.

As for conjecture, we are unaware of any fundamental reason why gold's secular bull market should be over. Indeed, low interest rates and monetary printing suggest that it is not over. Nevertheless, we will not rationalise price action which raises the possibility that the bull market in bullion could actually be over.

Currently, we are seeing stale bull liquidation in keeping with the global deleveraging process. When gold is driven by investment, it will increasingly behave like an investment, as I have said before. Judging from the recent chart action, there are still more people wanting to lighten on a rally than buy on a dip. As support levels established earlier this year on the way up are tested on the way down, it will be interesting to see when and where the next significant central bank purchase of gold bullion occurs.

(See also my comments on 13th December discussing what might be worrying the gold market and also on 15th December when I mentioned that should gold repeat its 2008 correction of approximately a third from last September's high of $1921, that would represent $640, taking the price back to $1381.)


(These charts were last updated at approximately 1720 GMT.)