"If you look at the daily chart ... we do have an interesting pattern on gold .... a possible topping pattern," says Jones. "If I'm an investor I am not taking gold long until I see a breakout in gold above recent highs." Jones is a long-term bull on gold, but is a short to medium term bear. "From a safety stand point if I live in the Eurozone and I have all these headwinds ... my currency could be drastically devalued in a short period of time." Jones warns that if the chart pattern plays out, then gold could correct to the $1,490 an ounce level. Jones isn't the only one noticing this pattern, however, and many traders will be looking to bet against prices to profit from a correction. But if it doesn't come and gold prices stay high, those traders will be forced to cover those positions, which in turn will drive prices higher, then "we are off to the races," says Jones. The physical gold market has been largely ignored as of late and could provide hidden support for gold prices. Bloomberg said Tuesday that India could buy 250 tons of gold in the fall during its festival season and Reuters said their channel checks pointed to strong gold demand among Chinese jewelers throughout August, despite record high gold prices. China and India are the world's largest gold buyers. Phil Streible, senior market strategist at MFGlobal, says this strong physical buying could influence the gold price if futures contracts go into backwardation -- where the spot month, or most heavily traded contract, trades higher than a longer dated contract. If that happens and "if you see that start accelerating ... then you want to look at getting long the front month because that is going to be your physical supply squeeze." Streible isn't trading that theory yet but is monitoring the price swings. Gold mining stocks were higher. Kinross Gold ( KGC) was up 0.92% at $17.56 while Yamana Gold ( AUY) was 1.70% higher at $16.01. Other gold stocks, Agnico-Eagle ( AEM) and Eldorado Gold ( EGO) were trading at $69.90 and $19.73, respectively.