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gold update 10/06/10

|Includes: SPDR Gold Trust ETF (GLD)
Gold has moved higher again today, reaching the important $1,350 level that I was looking for. Now the market's technicals are calling for a correction, while the gold bulls are getting very bold. Too many people are looking for the $1,500 area to be reached before too long. It is also my target---however I think a correction will take place before it can get there.

If the market breaks the $1,350 area convincingly to the upside it could move very quickly to the $1,375-$1,400 level. This would position the market for a more severe correction when it does come.

Most traders I speak to don't want to buy or sell gold at these levels. They want to wait for the sell off to add to their longs or lighten up their positions on an abrupt move to the $1,400 level.
When traders are afraid to sell [go short] a market it's usually a sign of excessive bullishness.

Investors should adhere to their long term accumulation plan and not try and "mastermind" this market. The volatility will gut any non-professional trying to "scalp" this market.

As I have said before, in the short term the market can go anywhere. In the long term prices will continue higher thanks to the fiscal and monetary policies of the world's major countries. Fasten your safety belt it's going to be a hell of a ride.

Disclosure: long GLD and Physical gold