Regardless of short term moves in gold that eerily seem to require demand from India to mark a major bottom (? till hyperinflation or worse panic in developed markets), the bull market remains both intact and the best-supported game in town as far as fundamentals, given the disastrous fundamentals for sovereign debt and underlying economic facts apart from "stimulus".
For people looking to put money into other than physical bullion, the question is what fund to buy, or what stock.
The new hot kid on the block, Eric Sprott's PHYS, is at something above a 10% premium to stated NAV. Gold-Trust, GTU, is at 10%. CEF, the grand-daddy (Central Fund of Canada, holding gold and silver), is a bit below those. The newest of the Central Fund funds is Silver Bullion Trust (SBT_U on the TSE and SVRZF on the Bulletin Board); in Canadian dollars SBT_U is at a 5.7% premium to NAV. Thus, SBT_U may be the best buy available now for people who believe that over time, silver tracks gold, short-term fluctuations notwithstanding.
People who have just a bit of faith in the multinational banks to be incompletely corrupt may want to look at SGOL. This mini version of GLD swears in its prospectus that it uses no derivatives. It is physical gold as best as we can tell. Its sponsor is the same group that has brought physical platinum (PPLT) and palladium (PALL) to the U. S. It trades richer than GLD. I personally have sold all my GLD, which has served me well, and segued to SGOL. There are no options out on the stock.
In the meantime, Rob McEwen of GoldCorp fame is trying to do it again with US Gold (UXG). The stock has an almost impeccable chart on the strength of positive exploration results from its Mexican silver properties. UXG needs to get some good news from its Nevada gold property. I'm betting on Mr. McEwen. Among the large caps, Barrick is OK but none excite me.
Given the analogy of the gold bull to the tech bull of the '90s, investors want the most supercharged vehicles, depending on how much cash they are risking. The more that goes into any vehicle, the more liquidity and safety most people want. For just a while, PHYS was hot--but the recent secondary offering took care of that, and the option to take physical gold from the fund is a negative from a tax standpoint for existing holders. So GTU may be one's best bet over time as PHYS holders may have an unpleasant surprise if others withdraw large amounts of physical gold. Historically, CEF can easily trade at a double digit premium to NAV and has done so even when GTU, run by the same people, has been at a much lower premium. So CEF looks interesting here, trading just above what the underwriters bought their shares at after its very recent secondary offering.
The long-term investor in me began keeping a significant core holding in physical and ETF gold some time ago, except for the obvious intermediate top in early December 2009. The trader in me says that this is an asset that given an apparent change in economic momentum downward could easily face a 2008-style liquidation-- meaning a major even if temporary bear market.
Unfortunately, the more the administration suddenly wants more "stimulus" only a week or two after promising to work on deficit reduction, the greater the core, non-tradeable gold holdings are required to hedge against the obvious worsening financial and economic problems of what was once the greatest economic growth story the world may ever have seen-- the U. S. of the 1800s.
Sic transit gloria.