US stocks rose for a second consecutive day despite ugly jobs data showing that the US economy shed 80,000 jobs in March.

Gold prices also edged $3.60 higher to $913.20 an ounce on the New York Mercantile Exchange.

“The ongoing correction in gold could be a ‘monster’ investing opportunity,” says Justice Litle.

Here are some factors worth considering:

• Hedge funds have been struggling mightily in 2008, as jittery investors pull their funds, leveraged positions are wound down, and battered brokerage houses cut off lines of credit.
• Funds with highly profitable positions in commodities and precious metals have been forced to cut back or even abandon those positions — not because they became unprofitable, but in order to reduce risk, meet investor redemptions, and otherwise “stop the bleeding” in other parts of the portfolio.
• A flood of hot money played a role in rocketing gold higher on the last leg of the run. This hot money has an LIFO mentality — “last in, first out.” When momentum starts to dominate, this type of pile-in happens at the extremes.