A. What if much of the Fed easing money was flowing into GLD and "physical gold"? Name any other commodity or real good up 400%. I like an inflation hedge in light of fed policy, but at this point gold IS Inflation.
B. When you buy your physical gold, what does the dealer take in exchange?
The government(s) are quite capable of manipulating gold prices, more so than any other commoditiy. Currently the govt. wants people spending,investing, consuming, and not hoarding money (gold) under the mattress. Other governments still want a strong US dollar, as the US is their best customer or (bond holder, did i say that right?). in time pressure could mount such that these sentiments change and then the gold pushers will be right 2,000 gold or something like that. one must draw their own conclusions and some gold might not be a bad way to assure capital preservation.
If one believes the government and fed have everything under control debt,spending, job creation. then there is no need to hold gold. but f there are any flaws in the governments plans then holding at least some gold makes sense. jmho