Just a few days ago, after gold prices reached record highs above $1900 an ounce, word was the gold bubble had finally burst. The chart had gone parabolic, CME Group raised margin requirements on gold contracts and gold prices were plummeting. THE END!

Meanwhile, what was really going on was . . . Once gold hit that fresh record high, normal profit taking was met with bursting bubble hype which exacerbated the move down. This separated the weak from the herd while the wolves waited to feast on those who left the herd's safety. As fast as someone was willing to sell, someone else was willing to buy.

We've been saying for months, maybe years now, gold supply is growing short. Just weeks ago, Standard Chartered came out with a report based on a survey of over 300 gold mines and determined gold production was going to fall drastically short of prior estimates. They also conquered with numerous other reports that central bank gold buying will stress supply and drive gold prices much higher.

Now, just as quickly as the gold price dipped $160 off its all-time high, it has rebounded to once again show that $1900 may be in its sights. Instead of seeing signs that a bubble has burst, we're seeing the opposite - incredible resilience! Maybe JP Morgan's call for $2500 gold by year-end isn't so far off.

Let's face it! Nothing has changed! The economy is puking, jobs are dwindling, home prices and home sales are crashing again and the expectations of QE3 are growing every day. I heard one analyst today say we're at least 10 years away from any kind of economic stability. Now, as another U.S. holiday approaches, I fully expect the gold-hungry of the world to step up and buy like crazy while we celebrate our waning days of summer.

And the cycle starts all over again. Record highs, profit-taking, bursting bubble hype and rebound. $1900 gold by next week is definitely on the radar.