of gold prices since the 1999 low, the last 18 months sideways moves do not resemble a major top in any meaningful sense. It has been the longest time period of arrested activity since the 1999 low, but the maximum price correction to 1526.70 to spring 2011 was only 23.6% of the rise from 1999. That's been painful for leveraged accounts, but not remarkable for a bull market correction.
I'm resisting the temptation to print Elliott wave numbers on the chart since there are always at least several possible counts one can make. But if we look at a monthly logarithmic chart the whole process since 1999 to 2011 looks like a solitary wave.
The 23.6% correction, a Fibonacci ratio, also suggests that we have been wandering in a belabored consolidation of the whole move since 1999. These simple chart observations in turn suggest that the bull market is not over, but it does not tell us when the climb will resume. It's even possible that the correction completed in August of last year, although if this is a correction of the entire bull market, it might well take longer in time. In fact it probably “should” take longer. A twelve year bull move might realistically need at least three years of consolidation, meaning 2014 would end it. Quite a few non-goldbug inflationists with good credentials expect inflation to remain subdued that long. But I'm only looking at this from a chartist perspective, not at economic or political analysis.
For gold speculators or investors it's best to trade the minor swings in a consolidation while holding a core position which is untouched. Given our normal human tendencies, it's hard to do either one of these things very well.
Sometimes it's easier to take a longer term view if one simply thinks of a portfolio's gold as insurance. When we buy home, health, or life insurance, we don't really hope for a nice payoff. We buy and keep insurance “just in case”. Hopefully our house won't burn down or be swept away in a storm, nor will we have a devastating illness or death any time soon. Then too, one could say that all longer term investments are insurance for a brighter future, or at least a future that keeps up with or does better than inflation and taxes. Those two are always our enemies along with entropy and aging.