Gold hit a new peak after a drop in the US dollar to a 15-month trough, resulting in the precious metal recording an eight-day winning streak. According to Bespoke, the current run represents the seventh time since 1980 that gold has had a streak of eight or more consecutive days with a gain. The report said: As shown below, the only time one of these streaks went for more than eight days was back in 1982 when the ninth day was also positive (on the tenth day it fell 5.7%, or $63 in today's prices). Looking out over the next week, there has been little consistency in the results as periods of negative and positive returns have been evenly split.


Source: Bespoke, November 11, 2009.

Meanwhile, if you are looking for an explanation for gold's strength that goes beyond the weak dollar argument routinely offered, take a few minutes to read Mish's recent post entitled Budget deficits soar out of control in Eurozone, Germany, US, UK, Japan; yen's last hurrah. Then consider as an investment option something that has no budget deficit (in Mish's words).

Fellow-bull Adam Hewison of expects a possible consolidation or correction before gold advances further. He explains his thinking in a short technical analysis presentation you can access here. As said a few days ago, I remain bullish on gold in the medium term but, given its notorious volatility, will only do additional purchases on pullbacks.