The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

NEW YORK (

The FRED Report

) -- Since our

last column

, there have been interesting developments in many of the markets we follow. Among the most interesting and treacherous has been gold (

video comments can be viewed here

). Gold has moved through two of the 12-month target prices we had at

The FRED Report

in the last month (we customarily use these prices as places to sell commodity oriented ETFs on strength). These prices were 1690 and 1890 on the nearby COMEX contract. Gold staged a sharp drop from the 1890 area and on our

Thursday call

we recommended adding money back to gold positions. We show the chart of Comex Gold and GLD (since that is what most of our readers use) below.

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The technical action in gold is still positive in spite of the drop, and our new 12-month target is 2100/oz on the nearby Comex Contract, or 210 on GLD, whichever occurs first.

One reason we like gold is that silver has been underperforming, which signifies health in the metals. We show the chart of SLV, below so that readers can see this.

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Gold could enter a choppy phase before resuming the advance, and readers may want to diversify their exposure to the metals.

One way we have been recommending to achieve this is to use mining stocks, which have outperformed the market in this period of recent turmoil. We show a chart of the OEF below, along with our favorite mining ETFs (PSAU and GDX). The chart of OEF is shown to understand the movements of the overall stock market in the U.S. Even if gold suffers another minor correction these should continue to outperform the general market.

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We remain long-term commodity bulls, and believe that inflation will win out over deflation in the long run

.

As such - the metals should outperform many other investments over the long term

. However, it is said that "trees do not grow to the sky", and in market terms this adage would mean these markets could be due for a pause in this area. We would look at additional ways to diversify exposure to commodities in general and the metals in particular.

Fred Meissner is founder and publisher of

The Fred Report

. Fred is a CMT and past President of the Market Technicians Association (MTA). He recently left Merrill Lynch's Market Analysis Department and Sector Strategy Department to form The Fred Report.�A detailed bio is here:

Fred Meissner

.