Gold : A First Stab at Where to Buy

• Compare monthly charts of Gold and Sugar.
• Gold trend is up despite current setback.
  
• Sugar : Spike high at 19.73 in Feb06, after which this level was not reclaimed until Aug09. Once exceeded, the market went ballistic. BUT .. the rise from the first break of 19.73 to the current 25+ level contains some very hairy moments including a pull-back all the way to 20. Notice the past 4 months' long spikes on the Sugar charts. Not easy to trade this.
• Gold : The equivalent of the 19.73 sugar spike high for gold is at 1031 in Mar08. I would make the current all time high of 1226 to be the equivalent of the 24.85 top in Sugar. Which means that we should see new highs in gold above 1226 eventually BUT not after some vicious price action as per Sugar between 24.85 and 20.
• This suggests that Gold is NOT a buy until we see something closer to 1031. Possibly best strategy is to set buy levels now far far away in small sizes and not look at them until filled. If not, one is bound to get swept away by emotions and market noise when the time comes.
  
• Loose implications here for timing in getting out of USD long trades as well given close correlations.
• The above is just ONE of many possible ways in which Gold could unfold. But if you believe that its uptrend is not over, then the sugar parabolic move is a good model for gold's equivalent.