Gold stocks are trying to develope a head-and-shoulders top similar to what is seen in the oil stocks. I am holding the mining stocks, because it appeared very likely the decline to 119 on the XAU was only the first wave down of a larger correction. Now it appears the next wave down has been stopped temporarily due to the mideast situation.
If the XAU is in a long-term bull market, the next decline should bottom out at the 121. If the market action shows the right positive signs at that low, we’ll add to our position in metal stocks.
Continued

How much time will it take for the bull to reassert itself in the metals? The last significant correction in gold lasted nine months, and there is no reason this correction could not last that long -- or longer.

What I see consistently during these corrections is that the XAU ends the correction and starts the advance before the metals themselves do, so I’ll be watching this interplay between the XAU and gold and silver to enter all three when the time is right. If the bull market remains intact and the Fed is forced to respond to a slowing economy and housing bust, gold, silver, and the XAU could do very well, even in the face of a decline in the CRB. IF the XAU declines in the next 2 months to 121 level, I would add more to my position.