By L.A. Little of, author of Trade Like the Little Guy.

Precious metals, particularly gold, have moved up precipitously over the past couple months -- some 16% higher. Is this move for real? Is this the long-awaited breakout where gold simply takes off and doesn't come back? Should you be buying here now?

Historically, you had to trade the commodities markets to gain exposure to gold, but since late 2004, individuals have had the option of purchasing gold via the

SPDR Gold Shares ETF

(GLD) - Get Report


Since the latter trades like a stock, has good volume and tracks the spot price of gold (less expenses), I'll use it for our analysis.

On a long-term time frame, the swing high from early '08 was removed last month -- and it occurred

with volume expansion

. That confirms, once more, that on a long-term time frame, this market is bullish.

The only concern on this chart is that GLD is now at the upper end of the channel. That means that resistance is just overhead, and although GLD could spike further, odds are increasing that it will take a break soon.

When we look at the intermediate-term time frame, the thought of a retrace crystallizes.

What concerns me on this chart is that the last swing point break higher was not confirmed -- it was suspect. Thus, this entire run higher since $1,000 gold is suspicious. It cannot be trusted on an intermediate-term basis. That's your red flag. That's telling you not to chase this move. It most likely will come back.

When we turn our attention to the short-term view, it is confirmed bullish.

Each of the breaks higher has occurred on increasing volume. If you are wondering why gold has gone higher even with the intermediate term trend in suspect mode, look no further than this chart.

So, consider what you have: A long-term bull market that is confirmed, yet the intermediate-term advance remains suspicious.

Finally, the short-term view is also confirmed bullish and driving the current spike higher.

Above is the view from the Trading Cube. When you see a setup like this on the Trading Cube, it is the ideal setup for a

buy the retrace

mentality. You have the long term supporting any pullbacks, and the intermediate term telling you that a retrace is likely. Now all you have to do is to figure out where to buy. Looking once more at the daily chart, you start looking at the last swing point.

If and when prices retrace to that area, and if volume shrinks compared to volume at the swing point, you buy it! It is that simple. Be patient and wait if you are not already in. If you are, then keep stepping those stops up behind you as this gets closer and closer to a likely turn on a short-term basis.

So, until next time, keep trading the charts!

L.A. Little is an author, professional trader and money manager who writes daily on

, a free educational site for traders and investors. He has been featured in Stocks & Commodities magazine and is the author of

Trade Like The Little Guy