"To balance the bulls here is a potentially bearish article on gold!"

David Fuller's view Gold (weekly & daily) is technically overbought in the short term, as you know.

Thanks for the interesting article which may interest others. Here is a section:

He told Mineweb, "If the US government suffers a de facto, much less a de jure, downgrading of its credit, that could have devastating consequences for the global economy and for everybody. That could drive the gold price to $1725."
As of Monday, he added, there were "28 million ounces of open interest in the August contract and that's going to have to be bought back on roll forward or delivered into and, between now and the end of July, that would cause upward pressure on gold."

And, he says, while gold could go up in the absence of one or the other of these factors assuming the other remains in place, "If the macro [situation] is resolved and the roll is behind us as of 1 August, both of those factors could disappear and take the legs off from underneath gold.

"This is a very similar situation to what we saw in silver in April. In April you saw silver go from $37 to $49 and if you looked at the metrics people were not buying silver coins in particularly heavy levels - they were not buying silver through the bullion market or through ETFs. What was going on that was driving the price up was some futures purchases because of debt concerns in Europe and the United States and the roll of the May silver contract. By 29 April that roll had ended and you had 375 billion ounces of May silver bought back. You were down to seven million ounces and the prices went from $49 to $33 in about three or four days. The same of kind of vacuum can occur in early August in gold."

Indeed, Christian says, CPM had actually expected gold prices to peak in the first half of 2011 and then come off because people would become more sanguine about the global economic prospects.

"But," he says, "all of those things that we thought would be resolved in the second quarter, the European debt crisis, the US debt crisis, Chinese inflation, remain unresolved so they are probably going to continue to be worrisome for investors and keep investors buying gold for a longer period of time.

As a result, the group sees the floor for gold prices around $1480.

"On a short term basis we are talking about $1580/$1585 right now, but over the course of August we won't be surprised to see the price of gold give up $120 or $140 from where it is today."

On a longer term basis, Christian remains more bullish on the price of gold, saying that the price of the metal is likely to remain about $1,000 "for the next decade at least".