"In our opinion, the market has a distorted view of reality which is misinterpreting data to fit its biases. Like all distorted views, it has supporting logic. The cornerstones of the conventional view are: (1) the U.S. economy is recovering; (2) the European banking system has been saved; and (3) the U.S. Federal Reserve ("Fed") will drain the excess liquidity from the system before the inflationary consequences arrive. If you accept this view, selling gold and gold stocks makes sense. Many already have. If you have doubts about this thesis, holding on to your gold exposure makes sense because gold and gold equities are currently priced as if these three statements are facts."

http://www.seabridgegold.net/Case4gold/Article/418/the-gold-market