Concerning gold, the creation of the gold ETF (GLD) back in late 2004 seemed like a big catalyst for the explosive move in gold from 2005-2011. Over that period gold more than quadrupled, and I always attributed a large part of that to the rollout of GLD. For the first time everyone and their brother could pile in without having to actually buy the physical metal, and GLD made it easy for Wall St firms to speculate on the gold price.
Another big aspect to the gold price in general is the built in price suppression mechanism by the US and UK central banks. Since their paper currencies are fiat/unbacked, they have an ongoing interest in managing the gold price.
China and Russia have been aggressively adding to their gold reserves for over a decade. Everyone knows there will have to be a reset of the global financial system at some point, since the dollar reserve system is getting long in the tooth. China and Russia want to ensure they have a place at the table in what comes next.
But the odds of the new financial system being gold backed seems slim, although they might need a partial backing in the beginning to ensure confidence in the new system. As an investor, I figure a 10% gold allocation makes sense, which is what Jim Rickards recommends. You hope the gold doesn't do too well since that means the rest of your portfolio in stock, bond, and cash, is still doing OK.
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