eric hommelberg comments on the recent move in gold, and does not expect a sharp pullback like last year:

TGR: Given the recent run-ups, would you expect a pullback before the price rises again?

EH: I don’t expect a sharp pullback; nothing like the correction last year. That’s not going to happen. Since gold breached the $1,000 mark for the first time in March 2008, the $1,000 area had been a resistance area. It took about five attempts to slash the $1,000 mark. A long-time resistance area becomes a support level once that level has been breached to the upside. That’s exactly what happened a few of weeks ago, when we saw our first weekly close above the $1,000 mark in history. Furthermore we had our highest monthly close ever as well and this marks the beginning of a new up leg. The charts leave no doubt; they point to gold prices of $1250+ within the next six months. When you analyze the long-term charts you’ll notice a pattern of long consolidation phases followed by sharp up moves. The consolidation phases last for about 18 months, the sharp up moves last for about six months, whereby gold can appreciate by 50% or more. We saw it in 2005 when gold just finished an 18-month consolidation period and then it shot up within six months from $430 to $730. That move started with a commercial signal failure, today with record high commercial shorts outstanding we could be on the verge of a commercial signal failure again.

TGR: So, how should investors play this market now?

EH: I wouldn’t try to trade it at all. The risk is to be out of the market, not to be in. I would just sit tight and enjoy the move. When confidence in the dollar is going to collapse, anything can happen to the gold price. It’s no use to predict gold prices of $1,500, $2,000 or $3,000. It’s just a matter of how much the dollar will be devalued. As I pointed out, I think we’re at the beginning of a sharp up move again and going to new record highs.

http://www.golddrivers.com/blog/post/2009/10/20/Eric-Hommelberg-Hold-That-Gold!.aspx