There's plenty of evidence to suggest that gold etf's contributed to the rise in the gold price, making it easily accessible to anyone with a trading account. As the SPDR GLD volume increased, so did the gold price.
SPDR GLD was launched by the WGC around Dec 2004, when gold was $400, gold spiked $1500 over the next 7 years.
The correlation between GLD volume and the gold price is undeniable and I'll post an updated chart when the latest gold price is on it when it's available The enthusiasm for gold during the boom years was everywhere, no more than on HC, with posters quoting the media and latest bumpf from their newsletter writers, most of whom got it completely wrong, and of course the vilification and hate mail about John Nadler who had the audacity to suggest gold might be overcooked.
Conversely, as the gold price declines it could well be working in reverse, GLD has shed 610 tonnes since the glory days and was down 9 tonnes last week.
The psychological feedback loop which provoked the infectious enthusiasm for gold on the way up could also be working in reverse, spreading fear and panic, just as it made investors overreact to the upside it could well make them overreact to the downside, as the bubble picked up steam to the upside, will it pick up steam to the downside?
Just as the oil bubble popped in 2008, the gold bubble popped in 2011, during both there was a media frenzy, a common theme being that 'the chinese are very smart and buying all they can'
Dyed-in-the-wool goldbugs will deny all this and quote Peter Schiff, Jim Rickards, Alan Greenspan, Jim Sinclair and other 'experts' about the Fed and central bank manipulation, and other paranoia about the decline in the gold price, but the psychological wreckage is probably irreversible, it was all just a speculative bubble.
We might not be at the capitulation stage yet, but it's not far off.
"the future ain't what it used to be"............................Yogi Berra
