Gold rallied $25 during today's session after falling to as low as $1225.70 overnight. The gold market has undergone a dramatic transformation throughout 2013; from fairly bullish sentiment with price near $1700/ounce to begin the year (remember Bill Gross vocally called for gold to rally during 2013), to extremely bearish sentiment and despondency among the last remaining holdout gold bulls as price languishes near $1250/ounce.

Although today is unlikely to be a major long-term bottom, there are plenty of signs that gold may be "sold-out" in the near term:

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Gold daily, click to enlarge

A rally back up to the $1275-$1300 area in the next 1-2 weeks would serve to keep the shorts honest before a final flush lower into year end.

Much more interesting than gold itself are the gold miners. Credit Suisse came out this morning to highlight the obvious; $1,200 is an important price point for gold because it is the marginal cost for many producers http://blogs.barrons.com/focusonfunds/2013/11/25/gold-at-1200-could-mean-miner-dividend-cuts-deferred-projects

What was much more interesting than this obvious statement from CS, was the fact that miners rallied into the close after making fresh 52-week lows during morning trade. More than ever before if you have a positive view of gold you are much better served expressing this view via the GDX. Gold miners have tremendous operating leverage from current levels and many shares are priced for $1100 gold already, any upside in the gold price will flow through to mining shares at a factor of 3-4x.

The risk is that if gold were to completely collapse (below $1,000/ounce) many firms would be hard pressed to stay afloat due to their high cost structures.