On this site on August 13, 2008, I had posted an article entitled, "The Dollar Breaks Out, So Buy Gold", and the article lays out some of the technical factors that I saw to make such a statement. I have also mentioned that central bankers are destined to do one thing: devalue their currency - they cannot help themselves. This would be gold friendly and dollar dilutive.

But once all the back slapping stops, let's really take a look at things closely. This past week I had written a commentary (on my own website) why I felt that gold was in a trading range. Today's "breakout" or whatever you call out does not change my analysis.

Why gold will do well at least in the short term? Gold is a safe haven. How do we know? Let's take my market timing system, which gave a bearish sell signal on September 5. If you bought gold during times of market duress (i.e., when the model is bearish), you would have done very nicely even in the 1990's.

So why is gold in a trading range? I believe the biggest threat to gold will be the Dollar itself. There is a high likelihood (based upon technical factors) that the Dollar will outperform gold in 2009.

Gold is still in a bull market, but this is nothing more than a price range.