What’s Next for Gold?

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When I do a post about precious metals – particularly shorting them – I get the feeling it would be safer to discuss politics and religion. Folks get very riled up about this topic.

I'm really torn about precious metals. On the bullish hand, one figures the trillions of dollars of "money" being created by the US are going to come back and haunt us. Many folks I respect, including Gary Savage and Jim Rogers, are calling for gold to possibly get to the $5,000/ounce level.

On the bearish side, I wonder if gold – – like other assets – – is going to tumble hard in the coming weeks. And although my opinion of Elliott Wave isn't quite as wild-eyed ecstatic as before, I still give some credence to the EWI STU folks that gold is heading back to under $700 before it makes a next move higher.

I've got a pretty good-sized GDX long position right now, and I covered my GLD shorts earlier today. So I guess the bullish arguments are winning me over, although I'm still not sure what's next. The real question is whether GLD is going to cut through that ascending trendline or if it's going to make a surge and complete the very impressive inverted H&S formation that has been in the works for the past sixteen months.