All the stuff the gold bugs proclaim about the Fed and US debt justifying some sky-high gold price just doesn't make sense to me. If gold is worth more because of QE, then everything else should be as well. Even the possibility of a mined gold “shortage” is dubious. How important can a shortage of something without a use really be?

The market rules – gold is only worth what the market thinks it's worth. The argument that gold should be over $2300 to match the inflation-adjusted previous peak of $800 is ridiculous. That was a bubble! There's no rule saying previous bubbles must be matched or exceeded. I suspect tulips will never again be worth more than houses. I have no idea whether the peak 2 years ago was the ultimate top or whether it goes to some insane level sometime in the future - and nobody else knows either.

To make an educated guess as to what gold is really worth, I like to compare it to other rare metals – most notably platinum. Platinum is far rarer than gold, harder to mine, and actually has a use which consumes a significant percentage of the metal. Gold can be recycled forever. Yet, for many months, gold had a higher price. Even now, gold is within 10% of the price of platinum. I think a good case could be made that gold is still overvalued.

That said, gold can be a perfectly good investment vehicle if you avoid thinking like a gold bug and just follow the technical signals. For what it's worth, here's my current technical read: Intermediate/long term: nowhere close to breaking the downtrend line from Sept 2011. Intermediate/short term: Break of the accelerated downtrend from April – potential bottom reached in July. Also potential (unconfirmed) higher low in Oct. Weekly MACD is positive. Short term: Minor downtrend break from the Aug peak. Daily MACD is positive.Seasonals positive into Jan. Gold stocks are in similar condition.

I'm back into some of the more liquid gold stocks for now, but always ready to bail in case conditions change for the worse.