Andras,

Here's my opinion. I started looking at gold in 2002 when it broke above $300 oz. At that time, I was looking at currencies because I felt that the dollar was being debased and I wanted to find the best substitute for a trade, I found that all the global currencies were being debased by their governments so I felt that they were all junk. So what about gold? It was moving higher for what I believed was the currency play. Wouldn't central banks eventually realize their mistake in debasing their own currencies and using too much $USD for reserves? Wouldn't they want to increase gold holdings? Funny thing is, they were / are selling gold.

As a commodity, gold production is in deficit to its demand. The deficit is made up by gold sales by central banks (Washington Agreement). If the sales slow, or even reverse to purchasing, what happens to the price of gold? This commodity / jewelry demand is not that important to me (although beneficial). The currency traits are.

IMO, gold will continue to rise until the global currency debasing ceases. Or it will stop rising in $USD if we stop debasing our currency. The recent news on M3 non-publication says to me (and apparently many other traders) that we are not near that time, it will be business as usual. This is all important to me, the rest of it is just noise. Buy weakness and sell strength.

As we approach $500, here are a few thoughts:

In "Reminscences of a Stock Operator", Livermore talks about round numbers being important for support and resistance. Gold basically blew straight through $400 in 2004 (against the thoughts on resistance at major numbers) to find a high along with the stock market at the end of December. Managers seeking performance, window dressing etc. pushed it to new highs, then sold in January 2005. Same could happen now with $500. It peaked at $430 and "experts" in gold called for a top and it dropped to $375 to shake out weak hands. It was a classic testing of mental strength and sticking to a rules based approach. The fundamentals haven't changed. Buy weakness, don't listen to b.s.

There is a lot of disinformation on gold in the media. Ignore it.

Fibonacci retracements have worked extremely well with gold. So when Bill tells you that gold or gold shares are in his accumulation zone, and then you see the price at a retracement level, this has been a very low risk entry point.

Trendlines also have held very well.

Use $gold:$xau ratio to see when to buy gold (GLD) or gold shares. If oil prices rise again, miners may underperform due to cost of production increasing. The lowest cost producers will outperform others. I saw a manager in CNBC mention Goldcorp as a low cost producer.

I will use noise to pick up gold shares down the road. This has been a very thrilling ride and it should continue to be.

Stick to the rules. What rules? Bill's rules.

Andras-
The ratio test would have clued you in to an extremely good buy point when Bill made his famous "Buy Gold/Buy Oil!" call in May. A very useful indicator. The miners were very depressed at the time.