Interesting discussion.

Probably I'm gonna be wrong, but I think there is a global bankers' and private market for gold providing a good base well over $1000. I'm thinking there might be a blow-off upwards in the next 2-3 months or so, with the somewhat regular seasonal late winter/spring gold market peak - there is a chance it's happened already this winter, but perhaps not. Having been invested in gold since the mid 2000s, last year was the first time I lightened up in spring, and bought bullion heavily during the summer lull, which worked well. If gold turns down here soon, I will buy again below $1100.

No doubt gold and gold shares will feel the draft of a general market turnaround. If the market turns down fast and there is another liquidity squeeze, then no doubt a big fall in gold and gold shares will ensue. Your 30% cash is a great idea - I was at 30%, but I'm slightly less now at around 20%, as I may be more worried about paper currencies and more positive on gold in the short to medium term. I've got a small short position on the general markets, financials and real estate.

The article you linked below, I think took a different view to mine - general negative views may be another indicator that gold is not in a bubble - to me gold is money, and never more so than now when UK and US personal and government debt is growing unsustainably from an already massive base. I think this is a once in a lifetime situation - gold isn't going to go up in a straight line - I'm trying to react to price, and have a personal chart of gold price, my bullion and my cash - I'm in neutral at the moment. I will be buying if it tanks, and selling if it rockets, and hopefully I will enjoy both. Your approach is only a few percentage points off mine - I just went back in over the last few weeks when gold was around $1080.

End of essay.