In today's world, the traditional link with the dollar has broken.
I think there is more to this market than just a fund bubble. There is a shift of capital and it is likely to be for the long term.
We are not going to plunge to $500 or $400. The market is going to stay within a price range of $540 and $650.
The market has just become more volatile because the funds are getting in and getting out. It's very difficult to control the market but it's not collapsing.
I believe this is new money and attracted by the fact that the price is going up. I think it will continue to be a major part of the investment portfolio, irrespective of gold prices.
It all helps to fuel the fire. Gold would have bounced anyway, but maybe not so quickly.
The funds are buying. I think it is necessary for the funds to have their positions at the end of the year on a strong note.
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