There should be no doubt that gold remains in a secular bull market.
Gold has corrected nicely and is now ready to begin working higher into the New Year with the recent highs around $540 a likely target faster than most people think.
Gold continues to defy the bears, skeptics and even ardent bulls all of whom continue to pay little or no attention to one of the most powerful factors driving the secular bull market.
After an overflow of bullishness at the beginning of the New Year, the gold market has entered a broad trading range between $535 and $570. This is allowing a very overbought situation to correct itself and set the groundwork for an assault on $600 this spring.
Strong physical and investment demand, increasing geopolitical concerns here and abroad and the likelihood of a resumption of the bear market in the U.S. dollar, are all factors that should drive gold towards its all-time highs.
The news of an attack on an oil facility in Saudi Arabia is just an example of the many different geopolitical events that underpin the secular gold bull market.
Since bottoming in 2001, gold has seen a two-steps-up, one-step-back rise, and Monday's big drop is nothing more than the start of the one-step-back part.