It took many years of study and analysis -- and untold hours of staring at market fractal patterns -- before I had one of those special "eureka" moments about the way markets behave at critical reversal points.

Although it's easy to lose sight of this, the main goal of any speculative endeavor is to figure out the point with the maximum potential return on capital, combined with the minimum potential risk to that capital.

In my opinion the point where there is the highest reward, with the lowest risk, is the third test of an important reversal level.

Gold is undergoing just such a critical third test right now, and it's doing it just above the massive $675 energy level that defined the whole last phase of the bull market.

The upside is enormous from here, while the downside can be kept well under control, as a definitive breakdown to new closing lows would not be good in this situation, and would require immediate action to close down positions.

Furthermore, the fractal dimension on the daily gold chart is at a very-high reading of 65, which is telling us that there is enormous energy available to power a very big trend.

This is about as good as it gets for a long set-up in gold.

Subscribers to the daily Fractal Gold Report are positioned well, as we took profits up at $920 right before the last plunge, and we again just took some quick profits before this latest decline, playing the short-term patterns while this bigger opportunity is developing.

Right now is the time to get back into gold for the next major rally phase. It should be starting at any moment.

Please follow this link for more information on the Fractal Gold Report.