Rather than oscillating within a wide horizontal trading range for a couple of decades, gold trended lower from its 1980 peak to its 2001 trough. However, there's a similarity between gold's price action over the past 6 months and oil's price action during the second half of 2004 in that, as was the case with oil, gold's initial break above long-term resistance defined by its early-1980s high has been followed by a sharp pullback to 'test' the breakout. As part of this testing process gold could drop back to $800 or perhaps even a bit lower, but the point is that this price action is quite normal and, in the grand scheme of things, bullish.
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