In the past month (since my last posting) we have seen spot gold decline from $915 to a low in the $860s and rally back to $890-$900. Gold investors must be getting bored and impatient as evidenced by the SPDR Gold Trust unit holders who have sold off inventories by over 23 tonnes thus far in April.
I think that gold has lost its momentum because the general (non-gold) market has been doing quite well. Since April 1st, the DOW has gained a handsome 5.6% while my gold related portfolio is just breaking even. It is my conclusion that the investing public has gained some badly needed confidence by the competent and reassuring roll-out of the Obama Administration's stimulus plan. Thus gold is stuck in a trading pattern where it is too early for inflation concerns to move the gold market up while the need for "safe haven" buying is not as compelling as it was earlier in the year.
For now I'm just a simple profit taker. If I can pick up a 20%-30% increase in a holding I sell. If I can repurchase my position at a 10%-20% discount from my selling point, I'm back into the holding. This requires discipline and is not that easy for me to do since I'm in a constant emotional battle with my old friends, fear & greed.
In closing I should again mention that Coeur d'Alene mines has been a good little profit maker over the past month.
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Yup, she dipped again, and now, one week later, she is up another $10. You're not sure you're ahead until you sell, and then you can talk about that trade. There is a significant opportunity cost to having your resources tied up for an indefinite holding period while you are waiting--but Jeff is right on: you wouldn't even think about that "opportunity cost" if the larger market were tanking.
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