The price of gold and the trading of gold stocks are hot topics in recent times. The price of gold is a well-studied area with plenty of information and opinions on the secular bull trend in gold. The correlation of gold stocks to the price of gold is a topic of interest for people trading gold stocks. An item of importance is the HUI Gold Bugs index on the AMEX (American Stock Exchange). If you tried to buy gold stocks in August or September of 2008, you undoubtedly would have found yourself being stopped out as gold stocks were on a decline searching for a bottom. The HUI was around 300 in September and bottomed around 150 at the end of October. Near the end of January/2009, the HUI was back up to 300.

Supposing you did your due diligence and managed to buy gold stocks in the October/2008 timeframe and held it, you would be confronted with an interesting situation in February/2009. Having seen your investment double, what should you do? Should you take profit on your investment now and wait on the sidelines in anticipation of a correction in the price of gold and gold stocks? Should you continue to hold in anticipation of a further rise in gold? The $1000/ounce mark is on the horizon for gold with predictions abound on how high gold will reach, and when.