It was the fear-driven trading of the former that helped gold break $1900 in 2011, and for good reason – stormy markets steer investors to safe havens.

But gold’s fortune has shifted in the past two years, and finishing 2013 down 28% seems to have sealed its fate – at least in the eyes of the short-term speculators. In reality, the same forces that are stabilizing stocks and suppressing gold are also the fundamental reasons long-term investors have been buying gold since the turn of the new millennium. The so-called recovery we’re now experiencing is just a lull in a storm that hasn’t yet abated.

Losing Touch With Reality

From the fiscal cliff at the beginning of the year to the budget stalemate and government shutdown in the fall, the US was not exactly a model of financial stability in 2013. Yet with each of these stories, the markets shrugged off any large dips and went on to reach record high after record high.