David Fuller's view Wishing to remain fully invested in anticipation of a yearend bull run, I will use any excess cash in my SIPPS account, mainly from dividends received, during market setbacks such as we have seen recently. This morning I topped up my small position in Denison Mines (DML CN) (weekly & daily) by approximately a third, paying C$1.48. Uranium shares are currently being overshadowed by rare earths miners. Nevertheless uranium may be completing its base and companies mining this strategic energy metal are medium to longer-term recovery candidates.

Two downside key day reversals in June made me cautious about gold's short-term outlook, while I have remained a long-term bull for all the reasons mentioned on many occasions over the last decade. This month Eoin and I have talked about the support found above lateral trading near $1150, a steady recovery and this Tuesday's impressive action when gold (p&f, monthly, weekly & daily) initially weakened with Wall Street before rebounding to leave a large downside tail on the candlestick chart, indicating that selling pressure had been more than offset by incoming demand.

Tactically, my purchase of gold today at $1240.2 for the December contract is not well timed as it has already rallied back towards its highs, which may provide some further resistance and it is overbought in the short term. I do not like to pay up and it might have been better to wait for either another pullback or upside breakout, whichever came first. However I am currently underexposed to precious metals at a time when seasonal factors will soon become more favourable and I can add to this initial small position on either an orderly pullback or upside breakout.

I have never bought gold as a hedge against disaster and am certainly not buying it for that reason today. However some people have bought gold because they trust little else. This does concern me because gold will face further competition from other assets when sentiment improves. I started buying gold approximately a decade ago because it was cheap, central banks were printing too much money and I felt that bullion would gradually be remonetised in the eyes of investors. Central banks are still printing fiat money and the price of gold remains in an overall upward trend against all currencies, as you can see in the Library. Gold is no longer cheap - at least not by Julian Baring's colourful and surprisingly accurate measure, but it is not expensive as you can see from this amended copy from Monday's posting:

Julian Baring - a splendid character who founded what is now the BlackRock Gold and General Fund, loved to value bullion on the basis of whether or not a gold sovereign would pay for dinner for two at the Savoy. Basically, gold was undervalued if a sovereign would not cover the cost of dinner, and overvalued when the price exceeded the cost of a good dinner. Today's price for a gold sovereign is £185, just enough perhaps to buy dinner for two at the Savoy, including a glass of champagne and a carafe of house claret.