What you stated is all obviously true, the indexes are indeed soaring, hitting record highs. The Russell 2000 is a perfect shining example and anyone who was long last year and held on is very happy, however what is the realistic longevity of the current bullishness when there are a number of wild cards out there, nuclear (OPEC) Mohammedan mad Iran for instance.
When the spot price of crude oil is hovering @$70 she could easily double (+) if Tehran's trigger happy madmen lash out and pay the highest price, right in the middle of the Persian Gulf's supertanker lanes. Maybe some people in the metals markets are deeply concerned over the prospects of blazing oil fields and oil tankers - or far worse this summer.
$100 plus oil prices and continuing bullish stock indexes do not mix but they drive gold off the charts as a hedge against a petrol-fueled-inflation-spiral.
Gold Tops $700, Platinum Rises to Record on Iranian Tensions
Canadian Dollar Rises Above 91 Cents for First Time Since 1978
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Gold may reach $850 this year, Licata said. He correctly predicted gold would reach $500 in 2005.
China has about 75 percent of its reserves in dollars, compared with about 1.3 percent in gold.
``It's very possible that we could hit $1,000 soon,'' said Frank Holmes, who manages $5.2 billion, including $1.5 billion in gold stocks such as Barrick Gold Corp., at U.S. Global Investors Inc. in San Antonio. ``Governments, such as China, are buying bullion. It's like the way smart people buy insurance.''
Some analysts said China may have already moved to increase its gold reserves, contributing to the strength is gold prices in the past year.
South Africa and Russia have said they want to increase their gold reserves.
Gold now $707.80 Silver: $14.58
"Five Factors for Favoring Silver"
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