Gold has taken quite a beating lately, along with just about every other widely-traded investment product you can think of–barring the U.S. dollar and U.S. Treasury securities, that is.  The rise in price of the latter two and sharp, protracted drops in stocks, real estate and commodities shows just how much fear exists among traders and investors that an even more significant downturn is in the offing.

Gold has traditionally been the “safe-haven” asset that investors  have fled to when economic and financial crises loomed or caught the markets out.  Gold prices have recently dropped right along with stocks, housing and other commodities, however.  Instead of shifting into gold investments, market participants have fled for the safety of the U.S. dollar and U.S. Treasury debt, just as they did in the “Great Recession” of 2008-2009.

Gold’s recent fall from grace has those who have long derided it as a financial anachronism saying that the gold rush, if not over, is at least coming to an end.  Gold bugs, on the other hand, say it’s nothing but a temporary downturn, a normal turnabout in an upward trend that will resume and carry gold to even greater heights.

Is the great gold rush finally over?

The Bears’ Case

That gold hasn’t risen along with the most recent surge in safe-haven demand is indicative of just how popular and widespread investing in gold has become, thanks in large part to the advent and growth of exchange-traded funds (ETFs).  It’s gotten so popular, in fact, that gold’s long-term correlation with stocks, bonds and other commodities has intermittently, if not typically, turned positive.