It still remains a risky asset - we should not underestimate the power of the Fed. However interesting and undervalued gold may seem to us, there are certainly possibilities for the Fed to kill gold. This is why I put only a maximum of 20% of my capital into solid gold.

Imagine what would happen if interest rates went up substantially. Gold would seem relatively less interesting and much more risky than buying treasuries. The problem with gold now is that too much of its fanbase is just in it for short term speculative purposes. And an increasing popularity of physical gold will not change anything because physical gold ounces are outnumbered by virtual gold ounces.

The only way to go is to see a major disconnect between virtual gold prices and physical gold prices. This would almost create a black market for gold.