I’ve been there – in the last gold bull market from 2000-2011. The biggest mistake I made was trying to be too clever. Exiting a young PM bull market, to try and take advantage of the inevitable corrections can leave you caught by rapid price reversals, where you end up buying back your position at a higher price. So what to do ?

This coming correction isn’t easy. We all know it’s coming, and I think it could be of the order of $200-$300 drop in gold. Short, but sharp. But will we turn down at $1890, $1950, $2000 or maybe even more ? The best guide I can suggest is little more than a rule of thumb – how far stretched we are above the supporting moving average (I say ‘supporting’, because the appropriate moving average which is supporting price, alters as we progress through the bull market). Roughly 25-30% is often about it, but it can stretch to nearer 50%. That would suggest somewhere near $2000. Many of my technical charts are targeting somewhere near $1950, which ties in pretty well, allowing for an ‘overshoot’.

If you’re unsure, then remember we are in a long-term bull market. The GSR has a long way to fall – suggesting silver will out-perform for a long time yet. Many silver miners, like the one below, have literally only just begun their bull markets, and will rise by 100%, 200%, 300%. Long story short, you can buy, hold and add on weakness – safe in the knowledge that every 10% or 20% correction will be wiped out as the bull matures. Keep a core of your ‘top picks’ and maybe trade a few others. That would be my advice, for what it’s worth.