Gold breaks pattern?

I wasn’t going to write about gold and silver today. Really, I wasn’t. But when I checked the Kitco website this morning, it was obvious that I would have to mention it.

Gold is down over $30 from yesterday’s close to $1,244.30 a troy ounce. Silver has been shorn of almost 60 cents to $18.94 a troy ounce.

These moves lower seem to be breaking the market pattern of 1980 that I have been regularly commenting on since May 1.

That’s the trouble with patterns. They are similar – until they aren’t. Then what do you do?

I suppose shutting one eye and squinting might be the answer if there would be a quick rebound.

Nothing has occurred yet that would prevent bullion from hitting a post-low rebound high the day after Labor Day as the 1980 patterns suggests, but today’s action raises doubts.

It is time to look to first principles.

Why do you own gold and silver?

Do you have physical possession of your holdings?

Are you in a position to comfortably ride out any fluctuations?

If you are satisfied with your answers to these questions, relax.

If you need a price rise by Tuesday, you will probably have to re-evaluate your position.

Of course, my view has always been rooted in collecting coins. Bullion provides a bonus from time to time, but the act of collecting helps keep a focus on the long term and away from the Internet, which makes it so easy to fret.

Buzz blogger Dave Harper is editor of the weekly newspaper "Numismatic News."