Gold Futures (U.S. $509.70)

In late November I said that the long term gold recovery was so strong it looked like a freight train running at full throttle. However, I thought the price should at least take a rest at $500. Gold didn't even hesitate at $500. It spiked up to almost $540 before settling back to where it is today. On my long term (monthly) chart, I can count five earlier spikes like this one (after the sharp recovery that began in 2001). In each previous case the setback following the spike has lasted two or more months.

If we're looking at another similar setback now, I can repeat my earlier statement that I will be surprised if we don't at least pause in the $500 area before moving on upward.

I often go back to read my earlier comments on a topic before writing an update. In the past, I have spoken regularly of a powerful gold uptrend, and every temporary resistance level I have mentioned has been rapidly penetrated on the upside. That's why I now refer to the gold recovery as a freight train running at full throttle.