Those interested in the deep inner workings of the gold market could get a sniff here:

[1] http://www.gata.org/node/8676

And the link on that page to:

[2] http://www.goldensextant.com/commentary37.html

The main point is that the gold leasing activity of central banks, a practice that suppresses the price of gold by allowing nearly riskless shorting by several large banks, may be “improved” (as in, made more effective)by the ETFs GLD and SLV. Other ETFs that have a rigorous backing by physical metal, such as [3] Central Fund of Canada (CEF), [4] Central Gold Trust (GTU), [5] Sprott Physical Gold Trust (PHYS), and the spot price of gold itself tend to be at a premium, or higher than forward prices. There is other strange behavior as well, but what it all means is conjecture.

One conjecture is that central banks are creating a situation is which a fractional reserve gold standard could be used. This gives them, through the help of certain large banks and perhaps the GLD and SLV ETFs, the ability to control the gold price without exposing the huge naked short position that has accumulated in their ongoing attempts to control the gold price.

A further conjecture, and one often espoused by Jim Sinclair, is that the powers that be will eventually establish a reserve currency backed by gold, possibly in a fractional reserve manner. This is the end goal of the dollar’s somewhat managed decline. Maybe a better phrase is, the dollar’s induced decline. If this end goal comes to pass, gold will settle at some stable price, presumably at a level higher than today’s price.

Anyway, all this stuff doesn’t matter much to the small guys, except that the likelihood of price manipulation is high. So you have to be careful, and holding physical gold is a smart idea in general.