I’m with Zeal and agree that I can start accumulate for the long term. But take a look at the gold chart. Since mid July, Gold’s in a well defined down channel with top of the channel currently at around $630ish. Until it breaks, it’s probably not going to go very far. But the drop is quite gradual. Marking the tops since mid-july you have gold going from $660 in mid-july to $640 in early september, and if gold does rally this time back to $630 you’re still talking about just a $30 drop or approx 5% in 3 months.

With overall weakness in commodities in general, there’s a good possibility that gold could be trapped in a range for months before a breakout on the upside could take it to the next level.

So I think there are both long and short term opportunities here. I intend to play the range for the short term. And when it hit the bottom of the channel I’d also accumulate for the long term.

Let see if it works out.

And note to Chris:
You may recall previously on your blog we had a discussion about your $574 warning. As I mentioned, similar pattern existed in 1973 which turned out to be an excellent buy opportunity. So I’m wondering what objective measures do you use to determine that a decisive break has indeed occurred ? I read somewhere that some traders would for example require price to stay below the target level for X trading days but would you be kind enough to share yours ?