David Fuller's view Despite the first two quotes in Tim Price's letter and the article above, I closed out my trading losses in gold (weekly & daily) and silver (weekly & daily) futures today for two reasons: 1) From a financial perspective, I did not want to lose more than the trading profits I last made in precious metals when I was long gold, silver, platinum and palladium futures back in August of last year, just before the strong rally; 2) Despite current short-term oversold conditions and the close proximity of prior support, supply still has the upper hand, judging from the weak response yesterday and today, and I did not want to ride out another possible downside hit.

For the record, my remaining March silver longs were sold at 29.758 this afternoon, against an average purchase price of $31.57. That was three-quarters of the position and I had overlooked reporting the triggering of a trailing sell stop at $30.45 on 14th Feb, against my purchase at $30.285 on 31st Dec. My April gold longs were sold at $1607.3 against an average purchase price of $1659. These prices include all spread-bet dealing costs.

As to the medium-term outlook for gold and other precious metals, I would be surprised if the secular bull market which commenced around 2001 is over, not least because of all the currency debasement that has occurred via QE and other means. However, that is an opinion and the bull market could be over because gold's trend is losing consistency.

For instance, looking at this monthly semi-log 10-year chart of gold, including the earlier peak just above $1000 in March 2008 (which you can see more clearly if you recreate it in the Library on your computer and include the 'Tracking On' function shown in the charcoal bar overhead), it took about 20 months before that high was exceeded in October 2009. The move that followed until the September 2011 high was the biggest and most consistent portion of the overall bull trend to date, but that persistent strength was an inconsistency relative to the duration of earlier upside moves within the bull trend.

It is now 18 months since that peak but with the price currently languishing near $1600, it would be asking a lot of gold to take out its high within the next 2 to 3 months. Atypically, it is at the lower side of its range at present, whereas earlier, lengthy consolidations occurred nearer to the range highs in the 18th month of those medium-term pauses.

Therefore, either the secular bull market is over, as many are currently saying, not least those with short positions in gold. If so, it will take out the current range lows and maintain that downward break. Alternatively, if gold's loss of consistency is part of a longer and rangier interruption within the overall bull cycle, its action will be less predictable and we will have to wait for some very clear upward dynamics and overall relative strength before reconsidering investment long positions.

Meanwhile, the present strength of platinum and especially palladium is not in line with the bearish talk we currently hear concerning gold and silver. Yes, supply concerns regarding South Africa's platinum production and uncertainty about Russia's palladium output, which I have referred to on a number of occasions, are the themes of the moment. Gold and silver production is less dependent on single suppliers but they are neither easy nor cost effective to produce, as we can see from the weak performance of most gold and silver miners.