"While gold demand from the western investors and store of wealth buyers has fallen in recent months, central bank demand continues to be very robust and this is providing strong support to gold above the $1,600/oz level. IMF data released overnight shows that Mexico added 16.8 metric tons of gold valued at about $906.4 million to its reserves in March." Russia continued to diversify its foreign exchange reserves and increased its gold reserves by about 16.5 tons according to a statement by its central bank on April 20."Who's right? Who knows? Maybe both are. If so, my guess is that the sellers are right in the short term. If Europe implodes, who knows what kind of rush to liquidity that might cause? In the long term though, that almost certainly means vastly more QE (give it a different name if you care to), and we know what THAT does to prices of everything.
Finally, if this next QE is the one where our monetary masters lose control, it's hard to imagine a price too high for gold--or too low for fiat currency.