Dugald Malcolm, Montreal, Canada.

Since the end of July, gold has been on a tear. From $1,160, it soared $100 to $1,260 in early September, breaking above the 50-day simple moving average along the way. At $1,260 it met resistance levels of the previous highs made back in June. After only a few days of hesitation, however, a strong $23 move broke gold above resistance levels and, since then, prices have not looked back, making new record highs on an almost daily basis.

With prices so high, some investors are hesitant to step in and buy gold here. Often investors feel as if they have missed the boat once prices have started to rise. And looking at the above chart, yes, boy have they risen! But despite the rise, the old expression “the trend is your friend until it ends” should be heeded here. Unless you believe that the fundamentals for gold have suddenly changed here, gold should still be considered a buy.

Very often, breakouts from levels of resistance produce the most swift and significant gains. That looks to be what is happening now with gold. What’s more, the technical indicators on the above chart show no indication that the upward trend is coming to an end anytime soon.

Don’t believe the daily chart? Then take a look at the weekly chart below. The trading range in place since late 2008 shows that gold still has more room to go to the upside.