Entering Stage Two!
Where are we now in the gold bull market, and how will we know when the gold bull market has run its course? The answer to that question lies in the understanding of the three stages of a bull market.

Stage 1
Bull markets begin in obscurity with only speculators and bargain hunters interested in the market. Often markets will double or triple in this first stage which will attract the attention of the professionals. This market will receive no press coverage and will be looked upon with ridicule by all.

Stage 2
Professional money managers will begin to notice the bull market and develop specialty products to take advantage of the trend. This is the longest stage, usually lasting for many years (5-10), and it is the most profitable. Prices may go up 10 to 20-fold during this stage. You will begin to see this market mentioned in the financial media on occasion, but the consensus is that this rise is just an aberration.

Stage 3
After years of exceptional returns in the bull market, the professionals finally admit that we are in a bull market and begin openly advocating the sector. The finanical media presents this market as the next "hot" thing, and talk about it incessantly. Individual investors finally take notice and pile in, not wanting to miss out on the easy money. This particular market is the talk of the office, Christmas parties and even the bartenders and barbers are giving buying tips. Of course, by this time, the easy money has already been made, and a bubble is immenent. After a massive selloff in a short period of time, the sheeple that bought in AFTER the hype lose the majority of their investment.

So, where are we now? I believe we are still in the beginning of Stage 2. Here's why.

In 2008, when the financial crisis hit, and investors ran for the "safe haven" investments, Treasuries went up as investors flocked to them for safety. At the same time, gold was relatively flat. There was no big rush into gold as it was not viewed by the financial elite as a safe haven alternative.

However, this past month has seen the markets react similarly in response to the debt deal crisis, with investors again fleeing to what are perceived as safe haven investments. Once again, Treasuries were purchased en masse, driving the prices of them up by about 15%. But, unlike 2008, gold was also purchased as a safe-haven investment, driving its price up by 25%.

My conclusion is that gold is now being looked at by the financial elite as an option for "safe haven" money. That is a classic "Stage 2" sign, which let's me know that we still have a long, long way to go in this gold bull market!