The market has just become more volatile because the funds are getting in and getting out. It's very difficult to control the market but it's not collapsing.
I think there is more to this market than just a fund bubble. There is a shift of capital and it is likely to be for the long term.
I believe this is new money and attracted by the fact that the price is going up. I think it will continue to be a major part of the investment portfolio, irrespective of gold prices.
It all helps to fuel the fire. Gold would have bounced anyway, but maybe not so quickly.
We're in a different mindset now, where gold is seen as a fireball asset and the funds are switching money into it.
We are not going to plunge to $500 or $400. The market is going to stay within a price range of $540 and $650.
The funds are buying. I think it is necessary for the funds to have their positions at the end of the year on a strong note.
In today's world, the traditional link with the dollar has broken.