If you are a patron of this cafe, you cannot say that the breakout and rally to 1375, and the retracement currently underway, were not prominently placed on the menu for some time.
So now what? Gold will retrace back to a more sustainable trend, consolidate, and then resume its bull market rally to the minimum measuring objective of 1455 and probably higher.
If there is a general liquidity panic gold will overshoot to the downside, perhaps considerably, and then gather itself and rally sharply back to the trend. I doubt that it would break the 1280 level except for an intra-week plunge, but that is always possible.
There will be the usual displays of human emotion, but this is a natural and healthy correction in a bull market. I was becoming very concerned that gold might continue on this new, more aggressive trajectory all the way to 1455. This would have resulted in a more damaging correction. The green trendlines are the 'safest path' for a sustained bull market.
This rally in gold and silver is an artifact of the crumbling of the post WW II US dollar reserve currency regime and its replacement with something else. Gold and other commodities were influenced, if not controlled outright, by an Anglo-American financial cartel for their own advantage, and far too often the personal advantage of a few powerful men. This is changing. What comes next, no one can say for sure.
As some have suggested in their bitterness there is the possibility that an authoritarian new world order can dictate prices of gold or anything else for that matter. This is not probable. But if that happens the price of gold may be the least of our problems. The propensity of people to say and do stupid things rather than admit their own errors and mistaken beliefs is sometimes remarkable. This is one of the themes in the movie classic Bridge Over the River Kwai. Some say that art imitates life. I would say that life on the internet imitates high school.
The trend will remain in place until the global currency regime evolves into something sustainable that supports balanced economic trade and activity. Once that level of systemic repair is reached, gold will stabilize at whatever level it 'fits' within the global scheme.
