Has the world gotten too bearish on gold?

We’ve noodled on this question, pointing to bearish sentiment readings and the surge in assets of investment vehicles that move inversely to gold, such as the PowerShares DB Gold Double Short ETN (DZZ).

Today, our friends at Stifel Nicolaus posed the same question to clients, as they emphasized that the net long positions - or bets on rising prices - has fallen to the lowest level since mid 2009. They also point out that ETF holdings have now dropped to the same corrective level as last August.

Gold has certainly lost some of its shine. Year-to-date, the SPDR Gold Trust ETF (GLD), which tracks the price of bullion, is down 6.5%. The miners have been mauled even harder: Market Vectors Gold Miners ETF (GDX) - which includes holdings like Barrick Gold (ABX), Goldcorp (GG), Newmont Mining (NEM), Kinross Gold (KGC), and AngloGold Ashanti (AU) - is down 13%.

However, gold bulls remain undeterred by this sell off.

Richard O’Brien, CEO of Newmont Mining, which is the world’s No. 2 gold producer, recently told Reuters that he expects gold prices to hit $1,400 to $1,500 an ounce this year and moving even up to $2,000 in the future.

For his part, Frank Holmes of US Global Investors urges gold investors to remain focused. The strategist on his blog today emphasized that gold is always driven by twin forces, as he sees it.

First, he says, there is the fear trade. Those drivers are negative real interest rates and deficit spending to support social welfare programs. There is also what he calls the love trade: gold jewelry demand in emerging economies is rising and remains the biggest component of the demand equation. Global jewelry demand was up 10% in 2010.

“As long as both the love trade and the fear trade are intact,” Holmes says, “gold will remain attractive.”