Pretty hard question to answer, but I'll take a stab at it. Take a look at what happened from Oct 9, 2007 to Mar 9, 2009. The broader market sold off almost 60% while the GLD made a gain of around 24%. I know that is pretty long term, but it tells us something.
If you shorten the range to Mar 18, 2008 to Oct 22, 2008 you see that the broader market sold off around 32% and the GLD sold off around 26%. Just so I'm not accused of cherrypicking.
It seems to indicate that if you are a long term investor you have nothing to fear.
Thanks. I've been fretting with the same question. I have a confession to make, however. I recently sold half my GLD position when gold was around $1755. Sellers remorse....big time. Now I'm looking to get back in, hopefully lower, but not necessarily. When I get back in I will up the percentage that GLD occupies in my portfolio from around 10% currently to at least 25%, but I will do it in 3 stages, not all at once.
you can buy some PUTS. i am expecting a sharp and quick pullback very soon. i bought a few PUTS that expire next week and in sept. if they go worthless, no biggie. still up HUGE on GLD (long since 40's). LMAO!!!