What's new?

That massive dive in the gold price (5.5% in a day) has had no kind of follow through. The price drifts about at the same spot it ended the day on Wednesday. The volume spike on Wednesday was big but not as great as the last real biggie that occurred on 26 November last. And the volume follow through on Thursday was very limited compared with other such events. And then on Friday trade was pathetic. Sliver showed a similar pattern.

What is extraordinary is that none of the other main markets were affected. It was as though someone dropped a huge rock into a pool and it sank without ripples.

By now you will know I take little notice of the news and allow the market to tell me what is happening. But with something as strange as this I was curious to see what others made of it so I took a little peek. It was much as I should have expected. It's amazing how many ways grown men (and women) have to wrap up the words "I have not the faintest idea." while still pretending to be on top of what is happening. Better still the fall came as no surprise to them.

My next trick is to decide whether I should go back into those very profitable gold and silver positions or is this the beginning of the end for the precious metals bull market. I can divide that question into two parts:

• do I still feel confident about the equity market? (My basic idea here is that equities seem poised to make a big breakout on the upside and I am perhaps 80% convinced that this will happen.)
• could the precious metal markets yield a better return than the equities? (I am fairly clear about the answer to this question - if I am right about equities I am convinced that I can make more money by share picking in a rising market. I can cash in my profits and if If feel the need to buy precious metals I will be in a position to buy more gold, silver or whatever.)

The risk I am running by doing this is that I could get caught out by a catastrophe which would catapult precious metals into the stratosphere and leave me struggling to dispose of my shares. Something to mull over in the next few days.

In the mean time the Dow plods on finding it hard to smash that  13000 barrier leaving my portfolio languishing with it.

One little idea did come out of listening to all those explanations of why gold was dumped as Bernanke spoke. It would appear that platinum has been outperforming gold since the beginning of the year and did not take the big hit that damaged gold. And then I looked at the charts and found that platinum and silver followed the same trajectory. I think I feel safer with silver. But a lot more thought needed here.