Gold is down over $37 per ounce this morning as the dollar gains back some of its losses.  A surprise hike in Chinese interest rates has reportedly caused the dollar to rise, bringing it up over 70 basis points this morning (which is a very minor gain in relation to its losses over the past five months).

But more importantly is a correction in gold.  Gold has been rising, and very rapidly at that.  Gold has been rising since July 28th when it closed at $1,161 per ounce.  In a healthy market you can expect to see gold (or any asset) rise and fall on a regular basis.  What are important to follow are trends.  We are in a bull market for gold which means the trend is upward for prices and has been for ten years now.

Gold will naturally trade within support and resistance trading ranges, and will rise and fall within those ranges until a break out is experienced.  Traders will use these ranges to make short-term decisions on when to buy and sell.  For the common investor trading ranges are not important.  The common investor should be looking at the long-term trend and try to time the peak of the overall market, not the intermediate highs.  Only experts should engage in day trading.

The key here is not to freak out when you see prices fall; they will recover until we reach the third and final phase of the bull market.  This is when a bubble occurs and it will be the time to get out of the market.  Just like the stock market prices rise and fall.  The DJIA is down over 190 points today but does that create panic?  No, because people are used to this type of market action in the Dow.

I take down days like today as an opportunity to accumulate gold coins at a low.  Even if gold goes down a little further in the next few trading days it is fine because I am buying for the long-term with the anticipation , and confidence that gold is going to end up much higher than where it is today.