The "dominant fundamental" for the gold market during the past few years has clearly been the 'illusion of central banking.' Allow me to explain a bit.

First there was the illusion that Fed easing would stoke enormous inflation. This proved to be false as the pernicious deleveraging cycle brought about by the global financial crisis carried with it very strong deflationary/disinflationary headwinds. Even though inflation never picked up substantially, precious metals got far ahead of themselves as market participants priced in inflation and currency devaluation years ahead of time.

Next, as the US economy improved market participants began anticipating a self-sustaining recovery and the Fed moving toward normalization of monetary policy. 2013 has been the year of economic improvement/housing recovery/reduced macro tail-risk. All of which have been extremely bearish for precious metals prices.

The market was "wrong" the first time in getting far ahead of itself in terms of its inflation and currency devaluation expectations. Now it appears that we may be on the verge of the market getting it wrong again with regard to overly optimistic expectations for the economic recovery and monetary policy normalization.

If this does indeed turn out to be the case, price will tell us. I see the current situation in gold quite clearly - above $1375 and there will be a very strong probability that gold will have completed a massive intermediate to longer term bottom:

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