Gold might be setting up a nice break to the upside from the looks of the chart. I have been bearish on gold pretty much all year since it topped over $1000/oz. in March. It fell all the way to the $725 level last month and but then spiked higher to $900 in just days after fears of dollar dilution as a result of the bailout plan announcement. Since then gold has consolidated beautifully back to the mid $800s forming a nice bull flag as I have shown in the chart. When the chart offers up a change of trend you got to trade it how you see it no matter what you thought before. Markets change and you must adapt with them.
This is a bullish pattern because the retracement after the initial runup was nothing more than profit taking on low volume. When the flag pattern is broken then the next leg up begins. I believe we could see this flag break anyday and I would be a buyer of gold in the low 900s (or the GLD in the low 90s) with a break of 920 expected shortly. I think gold can get to 960 fairly quickly so this is more of a swing trade. I would keep a stop under the 87 area if I were buying the GLD.
If you want to play it with options (now that they are finally listed for the GLD etf) then I would go with the Nov 90 calls for around $5.00.