Now we have the answer and it doesn't look pretty. Barrick's de-hedging program may have actually driven up the gold price with its buying, according to this report [emphasis mine]:
India's gold market, which is one of the largest sources of physical gold demand, is showing signs of lukewarm demand. What's more, I posted a few days ago that the US bond market could be poised for a rally. Could this rally in gold be the final capitulation of the bond bears (and conversely the gold bulls)?
Dehedging by the world's largest gold producer, Barrick Gold Corp. (ABX), has been the driving force behind gold's move above $1,000 a troy ounce this week, a price level analysts say is unsustainable.
Barrick said late Tuesday that it will close its gold hedges at a total cost of $1.9 billion over the next 12-months...
"We have more buying to do," the Barrick spokesman said.
I remain a long-term commodity bull, but nothing goes straight up. For the gold bugs who want to send me hate mail, I refer you to this.