Sentiment is getting a little extreme for this trade to continue too much further in the short term. Recently Bob Moriarty of 321gold.com sounded a note of caution (italics are mine):
Ten days later, he hedged his earlier comment and conceded the bullish case for gold based on an apocalyptic scenario for the US economy and Dollar:
Nothing goes straight up and nothing goes straight down. As edifying as it is to see silver and gold go up almost every day, now and again all markets take a breather.
I run a gold site and it's considered heresy to suggest commodities correct but they do. Even the lowly dollar goes in the opposite direction on occasions.
It's a time for caution. We SHOULD have a violent correction in gold and silver and the dollar based on emotion and government intervention but we could see $3,000 gold in a week or the start of a living nightmare brought to you by the Gang of Fools in Washington. No one knows.To me, that was the first sign of a speculative blow-off in the USD and commodities. The second sign: Both Energy and Gold stocks are at or near the top of their relative uptrend channels against the S&P 500. Can they go higher? Yes. However, the relative downside risk in the near term appears to outweigh the upside rewards.