Only two weeks ago, gold was stuck in this multi-month spiral:

Because the long-term trend was bullish, the congestion was at the high end of the long-term range, and loosening central bank policies were likely to support the metal, I wrote that “I suspect we may be near a major breakout.”

Well, we got it. The yellow dog has shot up $50 since then:

This is a substantial breakout. While I expect enough volatility to turn the stomachs of even the staunchest bulls, the most dangerous move here is calling a top. Truthfully, nobody knows how high gold could go. Gold does have a number of fundamental factors that could point to a significantly higher trading range over time: (1) a decline in central bank selling; (2) higher demand from ETFs and retail investors; (3) declining US dollar; (4) emergence of markets in countries like India and China where gold has a more significant cultural role; (5) majors buying out of hedges; (6) [in my opinion this could be much more serious than most anticipate] a huge increase in reserve replacement costs as the trophy mines of the majors tail off in production, exploration and lifting costs increase, and experienced mining and geological experts become scarce.

For these reasons, I still like both the metals and the miners — especially juniors and mid-tier. I remain bullish on both of the junior miners I bought in mid-August, Goldenstar Resources: GSS (added at $2.66, closed today at $4.20) and Western Goldfields: WGDFF.OB (repurchased at $1.94, closed today at $3.15), and own a handful of others. Have a great microcap mining name? Send me an e-mail with a short paragraph on why you like it.

DISCLOSURE: Long GSS, WGDFF.OB, gold futures, silver futures.