What makes you think gold at $1300 isn't evidence of an efficient market?
Eventually, gold will get hammered but I doubt it will happen soon. There will be corrections - there have been a few 20%+ declines since this gold market began. But thus far, all the foundations are still for a bull market. I would start looking for an end to the gold bull market if and when a flood of new supply comes into the market and/or monetary conditions get very tight. The Fed raised interest rates from 1% to 5.25% from 2003 to 2007 and gold more than doubled.
I wouldn't short gold here, except for a near-term overbought trade with tight stops.
We still haven't reached the euphoric stage of this yet.
Youi're joking. When radio ads tout gold the same way they did real estate, and before that stocks then we've hit a top. When I see people standing on streetcorners advertising to buy gold, we're at a top. You don't think all the scrap is going to gun supply? When the stock market starts making new highs all that money is going to pile out of gold and into stocks. I don't know whether this is really the top, or whether it's at 1300 or 1400 or 1500 but we're very close. Gold is thinly traded so it is subject to very big moves.
The funniest part of the gold equation is that most of the gold people buy isn't gold at all. It is leased gold. You "buy" it, pay for it, but the guy you buy it from doesn't have it, or own it, he just has a lease on it. And those leases are sold in a manner similar to fractional reserve banking in which many people are leasing the same physical gold at the same time.
When the premium between real delivered gold and leased gold collapses you will know that the bubble is about to pop. Last I heard that premium was still rising.
My gold is Eagles and in hand.
And yes I agree with you, there has been more gold sold than exists.
However since I bought at a little over $500 I don't think I will be hurt.