The first group of people thinks that commodities are immensly overvalued and that they will sooner or later surge. The second group thinks that deflation will prevail and that commodities will continue their way down. The first group tend to see gold as money with intrinsic value. The second group sees gold as a useless piece of metal that can only be used in jewelries. Who's right?
The platonic truth is that both are right. Value is only created through the eyes of the one looking. Throughout history gold has been money, and then simply a tool used in jewelries. The value people put into anything follow the swing of a pendulum; from one extreme to another. If we admit that is the truth, then the only thing we can do is ask if gold is currently hated or loved by the pool of investors and traders. When most people think its only a tool, its the time to buy, and when most people think its money, its time to sell.
I believe that gold has been loved so much these last years, mostly because of the internet and the promotion gold has received, that this pullback is simply healthy. However, like Warren Buffett said:"Gold is basically being long on fear."
Currently, people are not really scared. The US economy is "recovering" and world tensions seem to have eased. One can wonder what will happen when fear and consumer confidence sink? Gold will probably surge. For these reasons, I see gold more as an hedge than a speculative instrument.
Gold, miners, and their leveraged ETFs like NUGT and JNUG can be traded successfully. In my opinion however, they are not the easiest instruments to trade and make money with. The big advantage is that they will never go to zero. The big disadvantage is that big pockets with a variety of interests will try to influence them, and that may play against you.
That being said, I'm still watching miners to jump back in at one point. In the meantine I'm watching closely stocks like GPRO and TSLA who might turn out to be great opportunities.
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