5-year low on gold - what does this tell us?

Gold is supposed to do well in a crisis. Unfortunately, the recent Greek and China crises have not been good for gold. In fact, it has been a period of further declines as the crises did not play out not a  global flight to quality. It is not a given that gold will do well during a crisis. Gold is very particular on what it will respond to and there is not a pattern that can provide insight for investors. 

Gold is 40% off its price highs and speculative short positions are at the highest levels since 1995. The market hit highs during the last EMS crisis and when there was greater talk of inflation from QE. We now know that QE was not a recipe for inflation. Since that high, governments have been able to contain crises and inflation has not been a problem. Real rates have been negative and nominal rates have actually gone negative, but that has not slowed the slide in gold. Liquidity from the G3 is in abundance, but that has not helped gold prices. The Bank of China revealed its gold holding which disappointed many investors. The PBOC does not want too much gold for its foreign  reserves. Gold prices have declined with the better growth in the US and the strengthening of the dollar. Gold has moved down with other commodities over the last few years.

There just is not a good story for holding gold except that it may reverse if the fundamentals change. A reversal story at this time is a not a strategy for buying but a story for hope.