Cautionary Stance on Gold — Too Much Bullishness Already?

Disclaimer: I am currently long gold, both physical gold held in a private vault of mine, and speculative positions on the paper markets.

Is there too much bullishness in good old gold already to allow for a meaningful bounce from here? This is the question that I'm asking myself at the moment. While I don't know yet what to think of all this, my stops are in place to predict me from potential losses.

See for yourself the quotes below:

• Gold Bugs Defy Bear-Market Threat With Soros Buying: Commodities

(Bloomberg) Gold is stuck in the longest slump in a decade as investors shun bullion for the dollar and bonds, just seven months after Bank of America Corp. said Europe’s debt crisis would send prices to a record $2,000 an ounce. 

The bank was joined by Goldman Sachs Group Inc., Morgan Stanley and Barclays Plc in urging investors to buy in December and January. Now, after gold fell 10 percent in a four-month slide through May, they say prices will rebound this year or next as the Federal Reserve shores up the world’s biggest economy by easing monetary policy and devaluing the dollar. 

Billionaire George Soros bought more in the first quarter and hedge-fund manager John Paulson held on to the biggest stake in the SPDR Gold Trust, the largest exchange-traded product backed by bullion, Securities and Exchange Commission filings show. Some investors are refusing to capitulate even after failed elections in Greece drove the euro to a two-year low against the dollar and gold slumped as much as 21 percent in December from the record $1,923.70 set in September.
“The $2,000 target has moved further away, but it still holds,” said John Stephenson, who helps manage $2.7 billion at First Asset Investment Management Inc. in Toronto and predicted in November that prices would reach $2,500 in the next several months.

[...] Hedge funds and other speculators reduced their net-long positions, or bets on higher prices, by 70 percent since August, Commodity Futures Trading Commission data show. They held 77,325 U.S. futures and options in the week ended May 29, almost the fewest since December 2008.
Gold held through ETPs dropped for a third month in May, according to data compiled by Bloomberg. Combined with the decline in prices, the holdings are now valued at $123.6 billion, down from $141.7 billion in August.
[...]

Other quotes courtesy of ZeroHedge:

$8 Trillion Official Sector Likes Gold - UBS PollConfirmation of how gold is regarded very favourably by the official sector has come from the largest private gathering of central bank reserve managers, multi-lateral institutions, and sovereign wealth funds in the world - UBS' 18th Annual Reserve Management Seminar for Sovereign Institutions.
UBS' 18th Annual Reserve Management Seminar for Sovereign Institutions Asset Poll More than 80 institutions with collective assets under management of over $8 trillion attended the event and were polled regarding macroeconomic matters and their outlook for various asset classes.
Gold is seen as one of the assets likely to outperform again in 2012 due to risks posed to the euro and longer term risks for the dollar.
Those polled by UBS were also positive on emerging market debt. Both asset classes, gold and emerging market debt, were the top pick of 22.5% of the assembly – thereby accounting for 45% of the votes.

(Bloomberg) -- JPMorgan Lowers 2012 Gold Assumption to $1,791 From $1,844 JPMorgan Chase & Co. lowered its 2012 gold price assumption to $1,791 an ounce from $1,844 an ounce.
The 2013 estimate is unchanged at $1,831 an ounce, Roger Bell, an analyst at the bank in London, said in a report dated yesterday.

(Bloomberg) -- Gold Seen in UBS Poll as Top Performer With Emerging MarketsGold will share top spot with emerging markets as the best performing asset for the rest of the year as governments take steps to boost growth, according to about 23 percent of respondents in a UBS AG survey.

(Bloomberg) -- Gold ‘Belongs’ in Investor Portfolios, Council’s Artigas Says Investors should allocate 2 percent to 10 percent of their assets to gold in the long term, Juan Carlos Artigas, a manager of investment research at the World Gold Council, said today at a Bloomberg Link conference in Boston.
The metal “belongs” in portfolios because it provides investors with risk management and capital preservation, he said.

(Bloomberg) -- Gold Demand Not Going Away Any Time Soon, Winmill of Midas SaysInvestor demand for gold is “not going away any time soon” as growth remains resilient in India and China, said Tom Winmill, the president of Midas Funds Inc.