Gold breaking out is either the reflation trade version 48.148 OR uh oh something bad is coming down the pike trade ... gold has been in a big descending triangle getting narrower and narrower; when those break out in either direction it is generally a big move.

May - June 2009: $900 - $1000

July: $910 - $960

Aug: $930 - $970

Based on today alone, the direction appears to be up ... +2.1% thus far in the yellow metal BUT to be sure we want to see it get north of $970. Volume on the gold ETF (GLD) today is massive - well over 20M shares when almost all of August has been under 10M. Silver (SLV) continues its strength that we highlighted yesterday, up another 2.6%+.

One reader highlighted gold last week - I forgot who but kudos to the early call. Now we have to figure out what the message of the market is with these 2 metals aka what are HAL9000's algorithm's signaling to its microchips.

EDIT 3:10 PM: Gold Miners ETF (GDX) exploding - up 7% on nearly 3x normal volume. (hat tip reader on that one too) HAL is on the move.

p.s. anyone know what is going on with natural gas ? the ETF is down 8%?? UNG!

Long Powershares DB Gold Double Long in fund; no personal position