here i am on my soapbox. instead of quoting some analysis by an expert, for once i'm going to tell you what i think:

as i write this, gold is trading at $1213/oz. i had expected that gold would reach 1200 this year, and although i originally thought that would be in march or april, better late than never. as i had mentioned some time ago, the commentary from lemetropolecafe had passed on information from its "stalker" source (who is almost never wrong) that this would happen, and indeed it has.

it appears that something is at work in the gold market, and we may not know what that is until well after the fact. it is likely that at least one foreign government is now willing to take on the bullion banks in the commodity markets. it is possible that the cftc will finally impose some kind of position limits on gold and/or sliver, and that would end the charade of price discovery very quickly. or the imf gold sales, which may not even be sales at all, but just the return of pledged gold to its rightful owners, may stampede some of the eastern countries to step up their purchases of bullion.

whatever the cause, when there is enough smoke, there is bound to be some fire. the global banking system needs one bailout after another, and the bullion markets are under great stress. the short positions in silver and gold are completely untenable, as producers like barrick are closing out their hedges, and there is no way that jp morgan can ever obtain the physical silver bullion it owes. the silver etf (slv) is short tens of millions of ounces of silver, and the us mint has ceased selling silver coins (again.)

most likely sooner than later, the system will change abruptly, just as it did in 1964. one year our coins were made of silver, and the next year they weren't. the difference this time is that the price of silver has been suppressed for so long that it has a lot fo ground to make up. some market analysts say we could never have gold backing for our currency because there isn't enough gold to go around. but of course there is, it just has to be re-priced. it is the amount of that repricing that strains the imagination, as the last figures i heard were anywhere from $4000-$11000/oz.

i think the end game is near, and some sort of demand will be made by foreign governments, just as occurred in 1971 when france demanded payment in gold instead of dollars. and when that happens, i expect the tiny market for mining shares will get a lot bigger very quickly.

along the way there will be sharp price breaks as we saw last friday to shake out speculators, so avoid margin and just hang on for the ride of a lifetime.