Out of Bounds

The reflex is an only child, he's waiting in the park
The reflex is in charge of finding treasure in the dark
--Duran Duran

Hard not to like the picturesque breakout in gold today. Nice pop from the mini pennant formation on good volume.

Futes hit a record high today and finished closed strong above 1040/oz.

One news item driving the dollar lower, and thus gold higher, has been growing chatter that nations plan to switch out of USDs when paying for oil.

There's been considerable debate over whether sentiment towards the yellow metal is overly bullish or bearish. On one hand, many gold newsletter writers report that die hard gold bugs expect a sizeable correction pending--suggesting that the gold trade isn't very crowded. On the other hand, commitment of traders numbers indicate large short positions for commercial hedgers (the alleged 'smart money').

I've certainly been among the skeptics. For some reason, I haven't liked the action during the past couple of months. Perhaps my deflationary bent has tainted my view.

I've been out of 'paper' gold and silver since mid summer. However, my bullion position, a permanent holding, keeps me exposed to further upside should gold rip higher from here.

Meanwhile, surveying the post-close headlines, it does seem that gold's new highs are not grabbing much fanfare. Should my perception persist, it may prompt me to buy some GLD for a trade. The 'easy' entry would be GLD 100-101, should prices pull back and test the gap.

positions in gold, silver, USD